The Fair Work Ombudsman has secured a total of $179,221 in penalties in court in relation to underpayments of workers at two United Petroleum-branded outlets in Tasmania.
The penalties have been imposed in response to four migrant workers being underpaid a total of $20,230 across just two months' work, and false pay slips being issued, at United Petroleum-branded outlets at Sandy Bay in Hobart and at Kingston, just south of Hobart.
The Federal Circuit and Family Court has imposed a $135,143 penalty against KLM Foods Pty Ltd, which operated the Sandy Bay and Kingston outlets.
It has also ordered a $44,078 total penalty against Mr Loveleen Gupta, who was involved in the operations of the outlets as the sole director of KLM Foods and a manager of Vizaan Pty Ltd, a company which employed one of the Kingston outlet workers (but which has since gone into liquidation).
The four affected workers, each visa holders, including from India and Bangladesh, were paid unlawfully low flat rates for their work as console operators at the United Petroleum-branded outlets at Sandy Bay and Kingston between December 2020 and February 2021.
One was a junior, aged 19-20 at the time.
The workers were paid flat rates ranging from $16 to $23 per hour for a fixed number of hours per week, and not paid anything for extra hours worked.
This resulted in the workers being variously underpaid minimum wages, overtime rates, and penalty rates for weekend, public holiday and afternoon-shift work, under the Vehicle Repair, Services and Retail Award 2020.
KLM Foods and Vizaan rectified the underpayment of these entitlements for all four workers after the FWO commenced investigating - however, KLM Foods and Mr Gupta also breached the Fair Work Act by requiring one of the workers to then make an unlawful cashback payment of $6,353 to KLM Foods in June 2023. The underpayment resulting from that cashback has also now been rectified.
Individual underpayments ranged from $2,597 to $9,574.
KLM Foods also knowingly provided workers with false pay slips and knowingly provided the FWO with false timesheets.
Laws related to record-keeping and having written agreements for part-time staff were also breached.
Mr Gupta was involved in all the contraventions.
Fair Work Ombudsman Anna Booth said underpayments of visa holders are treated particularly seriously.
"We condemn the underpayments of migrant workers in this case. We also have zero tolerance for unlawful cashback arrangements that attempt to hide underpayments," Ms Booth said.
"Employers should be aware that taking action to protect vulnerable workers, like visa holders, is an enduring priority for the Fair Work Ombudsman.
"All employees in Australia have the same workplace rights, regardless of their visa status, and must be paid in line with Australia's lawful minimum pay rates for all hours worked.
"Any employee with concerns about their pay or entitlements should contact the Fair Work Ombudsman for free advice and assistance."
Ms Booth said providing false records is also serious and unacceptable conduct.
"Employers should be aware our experienced inspectors will test whether time and wages records are legitimate. If you use false records you will be found out and you risk being hit with substantial penalties," Ms Booth said.
Judge Karl Blake found that KLM Foods and Mr Gupta had "blatantly disregarded" the terms of Awards and found that the breach concerning the worker being required to unlawfully repay wages was "particularly unpalatable".
Judge Blake found that KLM Foods and Mr Gupta had shown no remorse for underpaying the workers and there was a need to impose penalties to deter them from future breaches.
Judge Blake said that some of the affected workers were "vulnerable workers" who had recently arrived in Australia and had little knowledge of their entitlements at the time.
Two of the workers, who came to Australia on student visas, gave evidence that the underpayments had a significant impact on their lives, including making it difficult to meet living expenses and impacting their overall well-being.
Noting evidence presented in court that the exploitation of migrant workers "remains a significant problem in the Australian community", Judge Blake said: "There is a need to send a strong and clear message to ensure that the type of conduct disclosed in this case is not repeated."
The Fair Work Ombudsman investigated the matter as part of a broader investigation into the United Petroleum network which commenced in response to concerns about non-compliance.
The FWO also commenced proceedings against Vizaan Pty Ltd, who employed a worker at the Kingston outlet, but the company went into liquidation after filing and, under the Corporations Act 2001, the proceedings were stayed against that company.
The FWO's broader investigation involved audits of 20 United Petroleum-branded outlets across Tasmania, Queensland, NSW, Victoria and South Australia.
The audits have also led to the FWO filing litigations against Sai Enterprises Pty Ltd and Raman Monga, in relation to an SA outlet, and Navaneeth Gogikar in relation to a Queensland outlet. Both court cases are ongoing.
Separate to the litigation matters, the audits also led the FWO to issue Compliance Notices to eight operators, leading to payment of a total $6,584 to 20 workers, and issue cautions to another five operators, mostly in relation to non-compliance with record-keeping and pay slip laws. Some of the FWO's investigations are ongoing and further enforcement actions are possible.
The Fair Work Ombudsman filed 146 litigations against employers involving visa holder workers, and secured nearly $23 million in penalties in cases that have included visa holder workers, in the seven financial years to June 2024.
