A Melbourne-based food wholesaler, Quality Food World, has been penalised $85,000 for “inexcusable” underpayments of migrant and overseas workers.

The penalty was imposed in the Federal Circuit Court following an investigation and subsequent legal action by the Fair Work Ombudsman. The investigation found the employees – mostly migrant and visa holders from non-English speaking backgrounds – were underpaid for work performed between October 2007 and March 2011. The employees performed production and packaging duties.

The employees were underpaid their minimum hourly rates, public holiday pay, overtime rates and annual leave entitlements with individual underpayments ranging between $125 and $10,218. Record-keeping laws were also breached.

When handing down his decision, Judge Grant Riethmuller said the underpayments occurred despite the Fair Work Ombudsman having put the company on notice in response to complaints from workers dating back to 2007. He also added that the company had shown "either willful blindness or recklessness" with regard to its obligations, and that there had been a "systemic failure to comply with the law".

"It is inexcusable in a situation where the business has such a large number of employees and a significant history of interaction with the Fair Work Ombudsman's office, it would not have complied with the relevant requirements," said Riethmuller.

Quality Food World claimed that it deserved credit for employing workers who may not have been able to gain other employment; a submission that was dismissed by Riethmuller who claimed that the company’s conduct “leans more on the side of exploitation of those least able to insist upon their rights, than demonstrating positive community spirit".

"Most of the employees were from non-English speaking backgrounds, new to Australia, and had limited knowledge of the rights and protections afforded to them under the Australian workplace laws. Some were in Australia only on student visas," he said.

"These breaches affected a group of employees least able to protect their own rights, and least able to locate and obtain employment in the community."

Judge Riethmuller also found a lack of genuine contrition on the part of Quality Food World, following a threat made during the investigation that the company would "just close the business tomorrow and sack all of the workers" if the matter went to court.

Quality Food World has now agreed to orders requiring the company to commission workplace relations training staff for its managers, a professional audit of its compliance with workplace laws, and legal advice on implementing processes to ensure future compliance. The company must also provide its employees with information on their workplace rights.

The company has now back-paid all workers it has been able to locate and will pay entitlements owing to workers it cannot find into the Fair Work Ombudsman's unclaimed wages fund.


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