Wages theft has cost one Brisbane-based The Ironing Shop franchisee $112,420.
ANS.HL Trading Pty Ltd, which operates four The Ironing Shop franchises at Teneriffe, Kangaroo Point, Norman Park and Ascot paid a Chinese national unlawfully low flat rates over a two-year period from 2015 to 2017 and made use of false or misleading records.
The business has been fined $74,700 and the Federal Circuit Court also imposed a penalty of $18,860 against each of the company’s directors, Mr Yuyin Luo and Ms Shujing Hou.
The Fair Work Ombudsman took the franchisee to court over the alleged low rates paid to the employee who worked across the four outlets for a flat rate of $8 an hour. This later increased to $12.
Fair Work Inspectors investigated the worker’s concerns and found she had been underpaid the ordinary, penalty, overtime and casual rates she was entitled to under the Dry Cleaning and Laundry Industry Award 2010.
The worker, then aged in her mid-20s and in Australia on student and bridging visas, was owed a total of $28,404.
ANS.HL Trading also failed to make the required superannuation contributions. The underpayments were rectified in 2019.
Luo, Hou and their company also failed to issue pay slips, ignored their record keeping obligations, made false records and breached workplace rules about frequency of payment.
Fair Work Ombudsman Sandra Parker said the penalties sent a clear message about the seriousness of paying below minimum wage rates.
“The alleged payment of low flat rates that undercut award entitlements is completely unacceptable. Employers must pay all employees according to Australia’s lawful minimum pay rates. Workers who are on visas are entitled to receive exactly the same rates as Australian workers,” she said.
Judge Michael Jarrett rejected claims by the directors that, having come to Australia from China, they did not know the flat rates they paid the affected worker were unlawful.
Judge Jarrett said the records had been falsified to show the worker had been paid $24 per hour instead of the illegal hourly $8 rate.
The Judge also found the underpayment had been significant over a prolonged period, and the employee was paid only just over half of what she was entitled to.
“The penalties in this case must be set at a level such that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons,” Judge Jarrett said.
