The Fair Work Ombudsman has commenced legal action against a toy retailer for underpayment of workers selling Christmas toys which will make it the first case to face the new 2017 penalties.
Eyal Israel and his company IE Enterprises are facing the Federal Circuit Court for allegedly underpaying his workers who sold Christmas toys at Uncle Toys pop-up stores across Victoria.
The alleged misconduct took place over the Christmas period of 2017–18, just months after new Protecting Vulnerable Workers Laws came into effect which increased the maximum penalties to $630,000 per breach for a company and $126,000 per breach for an individual.
The FWO alleges that Mr Israel paid eight workers an unlawfully low wage, as little as $6.70 an hour, and did not pay some employees at all for some hours worked during the Christmas period.
These underpayments of individuals ranged from $395 to $5,041, to reach a total of $21,748, none of which have been rectified.
The affected workers are predominately temporary visa holders in their 20s, and Fair Work Ombudsman Sandra Parker said this was the first case where the Ombudsman would utilise the new protecting vulnerable workers laws.
This is the first time the Fair Work Ombudsman will be relying on the new serious contraventions provisions in court which carry maximum penalties 10 times higher than traditional contraventions,” Ms Parker said.
“We’re arguing that five alleged contraventions are serious because Uncle Toys and its director failed to correct the non-compliance, despite extensive engagement with us.”
Mr Israel and IE Enterprises face five contraventions relating to minimum wages, failing to issue payslips and keep records, failing to pay employees in full and making an unlawful deduction.
It is further alleged by FWO that the Uncle Toys pop-up stores supplied three of the employees with false or misleading payslips with the wrong name and an invalid ABN. The maximum penalties for these breaches are $630,000 for the company and $126,000 for the individual.
The FWO is also seeking a court order requiring Mr Israel and his company to back-pay the eight employees in full.
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