Former owners of Melbourne wholesaler underpay worker $64,000 – FWO issues stern warning

The former owners of a Melbourne wholesaler have been fined $52,800 and ordered to backpay a worker more than $60,000, following action by the Fair Work Ombudsman.

Former owners of Top Value International, husband-and-wife Guo Hui Liu and Jun Hong Ma, have been individually fined $8,448 and $2,112 respectively and the company was ordered to pay a further $42,240 in fines.

The employee, aged in his 50s, was employed on a casual basis to perform tasks such as packing and organising stock, forklift driving and cleaning. The company dealt mainly in home and gift wares.

The worker was underpaid a total of $63,939 between November 2005 and June 2010 and the couple admitted responsibility.

Industrial relations lawyer Peter Vitale told Smart Company because there were multiple breaches, the fines aren’t as substantial as they first seem.

“There are three distinct breaches here. What the judge said in respect to the company is she took into account that they no longer conducted the business and that seemed to be a significant factor in reducing the penalty.”

“In this case she imposed a penalty of 40% of the maximum, in respect to the company you wouldn’t say it’s a substantial penalty for the nature of the breeches,” he says.

The maximum potential penalty per breach was $6600 for each individual and $33,000 per breach for the company. This equated to potential fines of $132,000 for Top Value International and $26,400 each for Liu and Ma.

As well as underpaying their employee, record-keeping and pay slip laws were also breached.

The underpayment was discovered when Fair Work investigated a complaint lodged by the worker.

Vitale says Liu’s fine was nearing the high end of individual fines.

“The conduct of the main director was found to be highly unsatisfactory (particularly his part in cooperating with the Ombudsman through the course of the litigation), the penalty imposed on him as an individual was very much close to 60% of the maximum,” Vitale says.

Federal Magistrate Norah Hartnett said in her decision Ma was fined a smaller amount because she had limited responsibility in regard to the underpayment.

But she acknowledged the seriousness of underpaying their staff.

“The underpayment to Mr White was comparatively significant in the context of his period of employment and his rate of pay,” Hartnett said.

Norah Hartnett furthered Liu and Ma tried to justify their actions by suggesting their employee “did not have the capacity to perform his duties, had poor eyesight and was suffering from a mental disability”.

She said this had no impact on their case since it was shown the worker had been employed with them for six years and was for a large portion of the time the only person who could operate some of the machinery.

Fair Work Ombudsman Nicholas Wilson said in a statement the court’s decision emphasises underpaying staff would not be tolerated.

“Blatant non-compliance with minimum pay rates is not acceptable and such conduct will not be allowed to go unpunished,” Wilson said.