Employer Fined for Exploitation of Overseas Workers

It has been alleged that young overseas backpackers recruited to work on mango farms near Darwin were underpaid almost $36,000 in just two months and some were allegedly paid nothing at all for weeks of work which included picking, weeding and pruning.

Background to the Case

Most of the backpackers were in Australia on 417 working holiday visas when they worked on the mango farms between September and November 2015. The 417 visa-holders were from Germany, France, Italy, the Netherlands, the United Kingdom and Taiwan. Other backpackers aged 19 and 20 at the time, were allegedly paid an average of $2 an hour. 

During 2015, the Ombudsman announced that it was conducting a national review of the wages and conditions of overseas workers in Australia on 417 working holiday visa with information to assist people from culturally and linguistically diverse backgrounds translated into 27 languages. This is only a small part of that review and one of many cases for which legal action has been taken.

The Allegations

The Fair Work Ombudsman (the Ombudsman) announced in September 2016 that it is taking legal action in the Federal Circuit Court against Mr Vinai Chaipom.

It is alleged that Mr Chaipom formerly ran a business trading as The Mango Shop, sourcing fruit from farms around Humpty Doo, and selling them via a roadside stall. The business was registered to a young Belgian backpacker who was in Australia on a 417 working holiday visa, but who is now an international student.

However, the Ombudsman alleges that Mr Chaipom controlled the business and was the true employer. The Mango Shop allegedly underpaid 11 overseas workers and one permanent resident from New Zealand a total of $35,630 for work performed on farms at Livingstone, Noomanah and Humpty Doo.

Most of the employees worked and camped on the mango farms and were hired after they responded to online job advertisements or approached Mr Chaipom for work. Three of the overseas workers were allegedly paid nothing at all. The New Zealand citizen was also allegedly paid nothing for four days' work.

Underpayment of the Employees

Other employees allegedly received wages of between $500 and $1,000, the equivalent of between $2.68 and $4.76 an hour. As casual employees, they were entitled to be paid minimum hourly rates ranging from $19.45 to $21.61 under the Horticulture Award (the Award). Individual underpayments allegedly range from $648 to $5,119. Chaipom allegedly also failed to issue employees with pay-slips.

The Investigation

The Ombudsman investigated after receiving requests for assistance from some of the employees. In February 2016, the Ombudsman issued the business with a contravention letter requesting that the employees be reimbursed all outstanding entitlements. However, the workers remained unpaid with some having left Australia.

It is alleged that in October 2015, Mr Chaipom was educated about minimum Award rates when inspectors visited mango farms as part of the Agency’s national Harvest Trail Inquiry. The Harvest Trail Inquiry was launched in response to ongoing requests for assistance from employees in the horticulture sector and confusion among growers and labour-hire contractors about their workplace obligations:

Potential Penalties

Mr Chaipom faces maximum penalties ranging from $5,400 to $10,800 per contravention. The Ombudsman is also seeking a Court Order requiring Mr Chaipom to back-pay the workers the money allegedly owed.

Reaction from the Ombudsman

Fair Work Ombudsman Natalie James says the alleged serious exploitation of vulnerable workers and the fact that Mr Chaipom had been put on notice of the need to pay lawful minimum rates were significant factors in the decision to commence legal action.

Previous legal action

In November 2015, the former operators of the Java Spice Café Emporium in Darwin (husband-and-wife Peter and Moya Buckley and their company) were penalised $73,000 for underpaying two Taiwanese backpackers.

In his judgment on that matter, Judge Stewart Brown said it was likely the exploited workers have already departed Australia

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Overseas backpackers allegedly short-changed thousands while working on NT mango farms - fairwork.gov.au