BrisClean Owner Fined Record Amount for Underpaying Workers
Tuesday 22 November 2016 @ 9.35 a.m. | Industrial Law
In legal action initiated by the Fair Work Ombudsman (the Ombudsman), Brisbane businessman, Bijal Girish Sheth (Sheth) has been penalised a record amount of $126,540 and ordered to back-pay migrant workers almost $60,000 in a result that sends a warning that individuals can be held personally liable if workers are exploited while employed by their business.
Background to the Case
It was alleged that Sheth was centrally involved in his cleaning company Brisclean Pty Ltd breaching sham contracting laws by deliberately mis-classifying four employees as independent contractors and underpaying them a total of $59,878 between August, 2012 and December, 2014. A fifth employee was also exploited but the underpayment of the worker could not be quantified due to a lack of records.
The company was placed into administration during 2015, and as such the Ombudsman could not pursue penalties against the company. Instead it used the Fair Work Act’s accessorial liability provisions to seek a penalty against Sheth.
The business paid the workers as little as $17 an hour and did not pay them at all for some work. According to the Ombudsman, the court ordered that if Sheth does not comply with the back-pay Order, then part of the imposed penalty will be paid to the workers instead. On top of the near-$130,000 penalty, Sheth has been ordered to back-pay the workers a total of $59,878.
According to the Ombudsman, this is not the first time Brisclean was warned, with the watchdog cautioning Sheth about sham-contracting previously, with 15 other allegations of underpayment made against the company.
Comment from the Fair Work Ombudsman
Fair Work Ombudsman, Natalie James says the outcome of the matter serves as a warning to the minority of operators in Australia that steps will be taken to hold them personally liable if they are involved in exploiting workers:
“Even if you liquidate your company, it’s no guarantee of avoiding the consequences of non-compliance with the Fair Work Act. Any rogue business operator who thinks they can short-change workers and get away with it by shutting their company down should think again. We will seek to hold you to account at every available opportunity and you should be aware that we treat exploitation of vulnerable, migrant workers particularly seriously.”
Ms James has advised the cleaning industry will “continue to be a priority” for the Ombudsman.
The Ombudsman also believes that Sheth is now operating his Brisbane cleaning business under a new corporate entity and the Ombudsman will refer the matter to the Australian Securities and Investments Commission.
Previous Successful Action by the Ombudsman
The Ombudsman also revealed it had recovered $1.9 million for 1500 cleaners at Oaks Hotels & Resorts Ltd after they were mis-classified as independent contractors and subsequently underpaid. The previous highest individual penalty was $98,000 against Tasmanian director Wendy Langridge.
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Sources:
Fair Work Ombudsman secures record $126,000 penalty against Brisbane businessman for underpaying staff – smartcompany.com.au
Record penalty against businessman who refused to clean up his act – fairwork.gov.au
