Melbourne labour-hire operator cops maximum Fair Work penalty after using worker’s pay for down payment on premium Peugeot - SmartCompany

By Alan J. McDonald

A Melbourne labour-hire operator failed to pay a foreign worker for 3 months of work. The operator used the employee’s wages to purchase a Peugeot instead. Managing Director Alan McDonald says referring the case to CDPP shows the judge is clearly trying to send a message that they don’t want these cases coming through the court and no one appreciating the seriousness of their misconduct.

Melbourne labour-hire operator cops maximum Fair Work penalty after using worker’s pay for down payment on premium Peugeot – SmartCompany.

A Melbourne labour-hire operator has been fined the maximum available penalty after he failed to pay a foreign worker any wages for three months of work, using the employee’s wages to purchase an expensive Peugeot instead.

The Fair Work Ombudsman pursued action against Leonard Greenan, operator of labour hire business United Consulting, in the Federal Circuit Court after receiving complaints from the affected worker.

The Court found a 29-year-old Pakistani worker in Australia on a bridging visa was not paid by Greenan for three months after he found him work in a Richmond car dealership as a mechanic. The worker also paid Greenan $9500 for a visa sponsorship service, which Greenan did not provide.

The ombudsman issued Greenan with a compliance notice ordering him to back-pay the worker $7,066, but it was not complied with.

The Federal Circuit Court found Greenan issued invoices to the dealership that were allegedly for the worker’s wages, but were “in reality for the progressive down payment of the purchase price for an expensive Peugeot motor vehicle”.

Greenan has been fined the maximum penalty for a company director breaching the Fair Work Act, amounting to $10,800, and Judge Joshua Wilson has also referred his case to the Commonwealth Director of Public Prosecutions (CDPP). Greenan has been ordered to pay the worker back a total $7,222.

“In view of my observations that aspects of the respondent’s acquisition of his car using money due to [the worker] might be criminal in nature, I have referred this case to the Commonwealth Director of Public Prosecutions,” Judge Wilson said in the judgment.

Judge Wilson also slammed Greenan’s actions as “appalling”, saying he “personally benefited” from the service of the worker instead of paying him, despite having many opportunities to establish a repayment regime, or “make any payments to [the worker]”.

“It warrants condemnation by the imposition of penalties for the brazen attitude that the respondent adopted,” Judge Wilson said.

“The only contrition exhibited by the respondent lay in his being caught. In my view, there was no real contrition in this case.”

Fair Work Ombudsman Natalie James welcomed the court’s decision, and said in a statement the conduct displayed here was “particularly disappointing”.

“The conduct of the labour-hire employer, in this case, was particularly disappointing, with a vulnerable overseas worker being exploited by the very person he was reliant on and had paid for assistance,” James said.

SmartCompany was unable to contact Greenan prior to publication.

CDPP referral a “rare step”

Speaking to SmartCompany, workplace lawyer Peter Vitale says the referring a employer to the director of public prosecutions was a “rare step for a judge to take”, but not unheard of.

In general terms, Vitale says businesses that employ visa holders must adhere to a strict set of requirements.

“Employers who sponsor employee’s visas are typically required to give an undertaking to the government to comply with all employment obligations, so an infringement or failure to comply with those undertakings may constitute a serious breach of immigration laws.”

Managing director of McDonald Murholme Lawyers, Alan McDonald, told SmartCompany a referral to the CDPP would only occur if the judge was “convinced of some appalling conduct”.

“The judge here is clearly trying to send a message to everyone that they don’t want these cases simply coming through the courts and no one appreciating the seriousness of their misconduct,” McDonald says.

“He’s putting everyone on notice, and he’s using a cut and dry case to do so.”

McDonald believes these cases are good news for smaller employers, as he thinks it shows the courts and the ombudsman are determined to “make compliance with the law in everyone’s best interest”.

“They’re doing this so we don’t have businesses getting away with outrageous conduct because that’s anti-competitive,” he says.

“It’s an onerous job employing people in this country, so we need to support people who are doing the right thing, and this is one of the ways to support those people.”

Reference: Melbourne labour-hire operator cops maximum Fair Work penalty after using worker’s pay for down payment on premium Peugeot, SmartCompany, Monday 4th September 2017.