$200,000 penalty for underhanded car-wash owner
July 27th, 2009
The Melbourne Magistrates Court has fined a car-washing and detailing business and its owner more than $200,000 for refusing to pay five casual employees for work they performed.
Richard Reid, the sole director of mobile car-washing business Reiquin Pty Ltd, attempted to put the employees on as contractors, failed to pay all or most of their wages, and then, when they said they would quit, would often demand that they work out a two-week notice period.
In a decision on penalty – the employer admitted the breaches, but refused to agree to a statement of agreed facts – Magistrate Kate Hawkins said the failure to pay their employees was entirely deliberate and formed part of a “a calculated campaign to derive personal financial advantage”.
Once complaints were made to the Workplace Ombudsman, the business and its owner attempted to evade correspondence from an investigator and took no action to pay the employees until “dragged to the door of the court.”
The conduct, combined with their failure to comply with a summons to produce documents issued by the court, verged on contemptuous and deserved a significant sanction, Magistrate Hawkins said.
“This case involves a deliberate, underhanded and opportunistic exploitation of casual employees, by an employer and its director without regard for its legal obligations, the enforcement bodies established to police those obligations and the Court established to enforce those obligations,” she said.
Further, the employer and director had shown no contrition for their conduct, with Reid in his evidence even expressing frustration at being left in the lurch by the employees.
Their “recalcitrant” conduct, and her inability to be assured they had learned their lessons and would not again exploit workers in the future, meant the penalty should also include a significant deterrent component, she said.
“The [employer and director] must get the message that they must comply with the law or close the business down,” she said.
She did, however, accept the employer’s argument that the offences concerning multiple employees should be treated as a single course of conduct in calculating the penalty.
This meant they should be penalised for 13 breaches of the relevant award and the Workplace Relations Act, rather than a total of 40 breaches if each offence was applied equally.
Given the seriousness of the breaches, she said, it was appropriate to apply a penalty at 70% of the maximum for each breach, and on that basis ordered the employer to pay $184,800 for eight breaches of the award or Act and Reid $23,100 for five breaches of the award or Act.
Yates v Reiquin Pty Ltd and Ors Case No. X02682613 (17 July 2009)
www.workplaceexpress.com.au Tuesday 21st July 2009