Car wash fined record $200,000 for underpaying — and non-payment
20 July 2009
A Melbourne car wash and its director have been fined more than $200,000 for underpaying five staff a total of $4511 — and some of the staff were not paid at all. The fine was so high partly because the director had shown no contrition for his action and tried to avoid making any reimbursements for two years.
More than 20 former employees of the Royal Melbourne Car Wash have now lodged underpayment complaints with the Fair Work Ombudsman.
The Fair Work Ombudsman told the Melbourne Magistrate’s Court that four of the employees were paid nothing for the several shifts they worked.
Paid nothing for 10 shifts
This included an 18-year-old who was employed to wash, clean and detail cars for 10 shifts but was not paid any of the $851 in wages he was entitled to.
Another 20-year-old was paid nothing for working six shifts over two weeks. He should have been paid $781.
Reiquin Pty Ltd, which runs the Royal Melbourne Car Wash at Camberwell, has been fined $184,800, and the company’s owner and sole director Richard Timothy Reid, of Malvern, a further $23,100.
The $207,900 penalty is a Victorian record for an FWO prosecution for underpayment of workers. The previous highest was a $183,400 fine delivered in May against Penang Kayu Nasi Kander Pty Ltd and businessman Poh Meng Hong for the underpayment of workers at their former Malaysian restaurant at Box Hill.
The Reiquin penalty was issued on Friday after the company admitted underpaying five casual workers in 2006.
The individual underpayments were $212, $642, $781, $851 and $2025.
‘Entirely deliberate’
Magistrate Kate Hawkins said she was satisfied the underpayment of the five workers was ‘entirely deliberate’.
In her 19-page judgment, Magistrate Hawkins noted that neither the company nor Reid took any corrective action ‘until they were dragged to the door of the court’.
‘Given the recalcitrant attitude of the defendants … the need for specific deterrence is very high,’ she said.
‘(They) must get the message that they must comply with the law or close the business down.’
Magistrate Hawkins said Reid and his company had ‘attempted to take advantage of the youth and naivety of the employees’.
‘… This case involves deliberate, under-handed and opportunistic exploitation of casual employees,’ she said.
Wholly unlawful
‘Mr Reid is university educated and I infer must have known at all relevant times the actions … were wholly unlawful.'
‘It is beyond contemplation that an employer in Australia in the 21st Century could think otherwise.’
Magistrate Hawkins said the law should ‘mark its disapproval of the conduct in question and set a penalty which serves as a warning to others’.
‘There is a need to send a message to the community at large, and small employers particularly, that the correct entitlements for employees must be paid and that steps must be taken by employers of all sizes to ascertain and comply with minimum entitlements,’ she said.
Reiquin and Reid refused to reimburse the five workers the money owed for more than two years. It was not until the matter went to court in February that the employees were reimbursed.
However, Magistrate Hawkins noted that Reid had not shown any contrition for his errant behaviour.
‘Mr Reid gives the clear impression to the Court that were it not for these prosecution proceedings and the matter reaching hearing, he would not have paid the amounts which these employees were entitled to,’ she said.
‘In demonstrating no contrition whatsoever the court does not have any comfort that Mr Reid or (Reiquin) have learnt their lessons and will not engage in such conduct in the future.’
Fair Work Ombudsman Executive Director Michael Campbell said the penalty should serve as a timely reminder to all employers to ensure they are complying with workplace relations law.
And Campbell said the best defence for young workers against being unwittingly exploited by dishonest employers is to know their rights.
