Court case goes ahead for oil rig companies alleged to have paid workers less than $3 an hour

The Australian Federal Court is set to hear a case involving two international companies accused by the Fair Work Ombudsman of underpaying oil rig workers by more than $127,000, after the court dismissed an application to halt the proceedings.

The Ombudsman alleges the four men were underpaid a total of $127,425 over nearly two years and were paid less than $3 an hour while working on two north-west shelf rigs operated by Woodside Petroleum.

The workers were Filipino nationals who were in Australia on sub-class 456 visas and worked 12-hour days, seven days a week as marine painters.

The Fair Work Ombudsman first launched the case in June 2011, but the most recent development has seen two of the companies in question, Pocomwell and Philippines-based Supply Oilfield & Marine Personnel Services, argue the Australian courts were a “clearly inappropriate forum” for the case as part of an application to stay the proceedings.

”It is inappropriate, vexatious, oppressive and an abuse of process to impose the terms of Australian industrial instruments upon foreign corporations and upon foreign seafarers subject to a different work environment, different labour conditions and a different legislative disciplinary regime,” they stated.

Another business, Survey Spec, is also involved. The company was contacted prior to publication, but SmartCompany received no response.

The companies further claimed the Fair Work Act did not cover “fixed platforms” and “Australian majority crewed ships”, instead saying they were only required to abide by Philippine employment laws.

The rigs were located in Australia’s exclusive economic zone. Justice Michael Barker dismissed the application for a stay of proceedings.

“It cannot be said that this Court is a clearly inappropriate forum,” Barker said.

“There is no prospect that any alternative foreign forum would be available to determine the rights and duties of workers pursuant to the application of an Australian law such as the FW [Fair Work] Act, a law that on its face appears mandatory. “

Barker also ruled the Fair Work Act does cover fixed platforms within the exclusive economic zone. The case will be heard on April 8 in Western Australia.

TressCox Lawyers Nick Duggal told SmartCompany cases involving international companies could become more common.

“There are a lot of foreign companies operating in Australia in some form and there are a lot of foreign workers coming within Australian jurisdiction,” he says.

Duggal says employers should make sure all their employees are being paid their legal entitlements.

“The important lesson is that even if you’ve engaged a third party to supply labour, you may well bear some responsibility and you can’t be aware that workers are being underpaid and not expect to have some liability,” he says.