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Melbourne retailer penalised $256k for exploiting migrant workers

Adrian Flores
Adrian Flores
16 February 2021 1 minute readShare

The Federal Court has imposed $256,000 in penalties against a Melbourne toy retailer company for deliberately underpaying migrant employees.

The fines include a $215,000 penalty against IE Enterprises, which operated Uncle Toys pop-up stores in Melbourne shopping centres, and an additional $41,000 penalty against Melbourne man Eyal Israel, the owner and manager of the company.

The Melbourne business was also found to have engaged in five “serious contraventions” under the Protecting Vulnerable Workers laws.

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Mr Israel and his company paid eight casual workers low rates (from as little as $6.70 an hour) and did not pay some employees at all for some hours worked. Record-keeping and payslip laws were also breached.

The affected employees were visa holders from countries including Malta, the Netherlands and the Republic of Korea, and most were aged in their 20s.

 

The employees were underpaid for between one and nine weeks of work performed between October 2017 and January 2018. They worked at Uncle Toys pop-up stores in Ringwood, Hoppers Crossing, Preston, Frankston, Narre Warren, Cheltenham and Wantirna South shopping centres.

In addition to the penalties, the court has ordered IE Enterprises to back-pay the employees a total of $21,748. Individual underpayments range from $395 to $5,041.

The Fair Work Ombudsman received requests for assistance from former employees of IE Enterprises dating back several years, and previously issued the company with a letter of caution, education materials and pay guides.

Judge Stewart Anderson found that Mr Israel and his company had shown “no contrition, no co-operation and taken no corrective action” for conduct that was “deliberate and systematic and had a significant impact on the relevant employees”, who were vulnerable, young foreign nationals.

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One worker gave evidence that she borrowed money from a friend in Korea to afford basic living expenses.

Another gave evidence that she was “very worried” about how she would afford to pay for food and accommodation, while another employee said he was afraid that, if he resigned, he would not receive his previous week’s wages, and that he “felt exploited and helpless”.

Judge Anderson said there was a strong need in this case to impose penalties which were high enough to deter other employers from similar conduct, particularly in the retail industry, which attracts young, often unskilled overseas workers.

“Underpayment of employees and the exploitation of vulnerable employees undermines core principles of the Australian workplace relations system. Those core principles include an enforceable and fair safety net of employment terms and conditions,” Judge Anderson said.

“It is, in my view, fundamental to the effectiveness of workplace regulation in Australia that this safety net is extended to all employees, regardless of their youth or visa status.”

Melbourne retailer penalised $256k for exploiting migrant workers
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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