“On notice”: Clothing retailer faces tough new penalties in Fair Work test case

Children’s clothing retailer Blue Sky Kids Land will face Federal Court accused of underpaying four migrant workers over $140,000 in what will be the second case to consider tougher penalties under vulnerable worker laws.

In a case expected to be watched closely, the Fair Work Ombudsman (FWO) will for the first time employ untested provisions under workplace laws relating to hindering or obstructing a fair work inspector, alleging one director of Blue Sky shuttered one of their stores to prevent a site visit.

The ombudsman claims Blue Sky directors Guo Dong Gu and Fei Rong Yang paid four migrant workers, who spoke little English, as little as $10 an hour, resulting in between $16,007 and $47,285 in stolen wages per worker over nearly three years.

It is alleged Blue Sky engaged in serious contraventions of the 2017 Protecting Vulnerable Workers Act, which introduced penalties for serious breaches 10-times higher than would ordinarily apply.

It will be the second case to consider the relatively new laws, with the ombudsman also launching a Federal Court bid against a Melbourne toy retailer for serious contraventions in May. 

“Employers are on notice that the Fair Work Ombudsman is making full use of the Protecting Vulnerable Workers laws to ensure that any individuals or companies who commit serious contraventions are held to account,” fair work ombudsman Sandra Parker said in a statement circulated Friday.

The maximum penalties per breach under serious contravention provisions within the laws are $630,000 for a company and $126,000 for an individual.

The FWO will also allege the company and one director obstructed its investigation by ordering the deletion of timesheets, and also provided false records to inspectors.

An employee at the company was also threatened with dismissal for speaking to an inspector unless they agreed to be engaged as a contractor, which would have stripped them of many workplace rights afforded to employees, the FWO alleges.

The case is just the latest in a string of underpayment pursued by the FWO in excess of $100,000, as regulators and legislators grapple with widespread non-compliance with workplace laws in Australia.

The ombudsman is seeking a backpay order, which implies the company has yet to repay the stolen wages. 

A directions hearing is listed for the Federal Court in Sydney on October 14.

SmartCompany contacted Blue Sky Kids Land and its directors but did not receive a response prior to publication.

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