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$500k fine for SME, directors guilty of exploitation

Adam Zuchetti
Adam Zuchetti
07 December 2017 2 minute readShare

The third highest penalties ever imposed in a Fair Work case have been handed down to a business and its directors who were found guilty of worker exploitation.

Perth-based Commercial and Residential Cleaning Group and its husband-and-wife owners Mark Povey and Catherine Paino-Povey were fined a collective $510,840 for what the judge described as “deliberate” and “systematic” exploitation of overseas workers.

As staggering as the fines are, it is not the first time the couple have been found guilty of such actions. The Fair Work Ombudsman said penalties totalling $343,860 were given to Ms Paino-Povey and another cleaning company she operated in 2013, again for deliberately underpaying both local and overseas workers.

Hearing the case in the Federal Circuit Court, Judge Antoni Lucev suggested the couple had failed to clean up their act after the 2013 case, given the most recent case involving three Taiwanese workers “demonstrate similar circumstances and a similar mode of operation”.

Judge Lucev said: “It is open to infer that the Respondents’ actions towards the employees formed part of a deliberate business strategy to engage vulnerable employees, refuse to pay them during their first few weeks of employment, refuse to pay them their full entitlements when they fell due… and then refuse to pay outstanding wages owed to the employees on the termination of the employment relationship.

“Beyond the inherent seriousness of the Respondents’ failure to afford the employees’ basic minimum employment entitlements in the form of regular wages and entitlements, there are significant aggravating factors in this case, including the deliberate and repeated nature of the Respondents’ conduct, the prior similar conduct and the vulnerability of the employees.”

The three workers were underpaid by a combined $11,511. One of the workers was found to have been paid only 34 per cent of what she was entitled to, and in her evidence, said she was forced to eat only one meal a day and borrow money from friends simply to make her rental payments.

The size of the penalties, according to the judge, is in part to deter the couple from continuing to act unlawfully in the future.

“The Respondents have failed to show any form of contrition or intention to alter their behaviour which suggests a lack of responsibility for their actions, and that the likelihood of further contraventions is high,” Judge Lucev said.

Fair Work Ombudsman Natalie James said the situation is abhorrent, and noted the far-reaching effects that staff underpayment has on not just the affected workers but on competing businesses and the broader economy.

“It is extremely frustrating to encounter such callous, recidivist exploitative conduct in the community,” the Ombudsman said.

“Those employers who think they can profit from blatant exploitation of vulnerable workers need to get the message that we are committed to pursuing you to the full extent of the law to ensure you receive the punishment you deserve.”

Ms James added: “It is clear that others share our frustrations with the courts increasingly ordering larger penalties, particularly in cases involving the exploitation of vulnerable workers.”

The fine comes less than six weeks after another Perth-based cleaning business and its owner were penalised $306,000 for paying employees nothing.

$500k fine for SME, directors guilty of exploitation
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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