Media release

19 July 2009

Record $200,000 fine for Melbourne car wash for short-changing staff

A Melbourne car wash and its director have been fined more than $200,000 for underpaying five staff a total of $4511.

The Fair Work Ombudsman – which initiated the legal action – has welcomed the penalty.

“This sends a very clear message to unscrupulous employers that there’s a high price to be paid for trying to rip off your workforce,” FWO Executive Director Michael Campbell said. 

Reiquin Pty Ltd, which runs the Royal Melbourne Car Wash at Camberwell, has been fined $184,800 and the company’s owner and sole director Richard Timothy Reid, of Malvern, a further $23,100.

The $207,900 penalty is a Victorian record for an FWO prosecution for underpayment of workers.

The previous highest was a $183,400 fine delivered in May against Penang Kayu Nasi Kander Pty Ltd and businessman Poh Meng Hong for the underpayment of workers at their former Malaysian restaurant at Box Hill.

The Reiquin penalty was issued in Melbourne Magistrates Court on Friday after the company admitted underpaying five casual workers in 2006.

The individual underpayments were $212, $642, $781, $851 and $2025.

More than 20 former employees of the Royal Melbourne Car Wash have lodged underpayment complaints with the Fair Work Ombudsman.

Magistrate Kate Hawkins said she was satisfied the underpayment of the five workers was “entirely deliberate”.

In her 19-page judgment, Magistrate Hawkins noted that neither the company nor Reid took any corrective action “until they were dragged to the door of the court”.

“Given the recalcitrant attitude of the defendants … the need for specific deterrence is very high,” she said.

“(They) must get the message that they must comply with the law or close the business down.”

Magistrate Hawkins said Reid and his company had “attempted to take advantage of the youth and naivety of the employees”.

“… This case involves deliberate, under-handed and opportunistic exploitation of casual employees,” she said.

“Mr Reid is university educated and I infer must have known at all relevant times the actions … were wholly unlawful.

“It is beyond contemplation that an employer in Australia in the 21st Century could think otherwise.”

Magistrate Hawkins said the law should “mark its disapproval of the conduct in question and set a penalty which serves as a warning to others”.

“There is a need to send a message to the community at large, and small employers particularly, that the correct entitlements for employees must be paid and that steps must be taken by employers of all sizes to ascertain and comply with minimum entitlements,” she said.

The Fair Work Ombudsman told the court that four of the employees were paid nothing for the several shifts they worked.

This included an 18-year-old who was employed to wash, clean and detail cars for 10 shifts but was not paid any of the $851 in wages he was entitled to.

Another 20-year-old was paid nothing for working six shifts over two weeks. He should have been paid $781.

Reiquin and Reid refused to reimburse the five workers the money owed for more than two years. It was not until the matter went to court in February that the employees were reimbursed.

However, Magistrate Hawkins noted that Reid had not shown any contrition for his errant behaviour.

“Mr Reid gives the clear impression to the Court that were it not for these prosecution proceedings and the matter reaching hearing, he would not have paid the amounts which these employees were entitled to,” she said.

“In demonstrating no contrition whatsoever the court does not have any comfort that Mr Reid or (Reiquin) have learnt their lessons and will not engage in such conduct in the future.”

Fair Work Ombudsman Executive Director Michael Campbell says the penalty should serve as a timely reminder to all employers to ensure they are complying with workplace relations law.

And Mr Campbell says the best defence for young workers against being unwittingly exploited by dishonest employers is to know their rights.

Mr Campbell said that a particular obnoxious aspect of this case was the refusal to pay staff for work they had actually performed.

“This is completely unacceptable and I want to make it abundantly clear that want-to-be slave merchants will be rooted out and prosecuted,” he said.

“There is no excuse for underpaying your staff, and those who want to try it on should remember that there is a tough and vigilant watchdog on the beat.”

The Fair Work Ombudsman achieved its highest-ever penalty of $288,000 earlier this year against small Adelaide cleaning company Saya Pty Ltd for underpaying two vulnerable workers, an 18-year-old woman and a newly-arrived migrant from Iraq, less than $4000.

The Fair Work Ombudsman aims to promote harmonious, productive and co-operative workplaces. It also monitors compliance and investigates breaches of national workplace laws.

Mr Campbell strongly urged employers unsure about what entitlements to pay their staff to seek assistance from the Fair Work Infoline on 13 13 94 or visit www.fwo.gov.au.

Media inquiries:

Craig Bildstien, Director Media & Stakeholder Relations,
0419 818 484
craig.bildstien@fwo.gov.au

Ryan Pedler, Media & Stakeholder Relations Senior Adviser
(03) 9954 2561, 0434 365 924
ryan.pedler@fwo.gov.au

 

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Page last updated: 19 Jul 2009