$120,000 fine for employer who bullied vulnerable trolley collectors

August 5, 2008

A company which underpaid and bullied disabled workers hired to collect supermarket trolleys has been fined $120,000.

Federal Magistrate Philip Burchardt says the company - Xidis Pty Ltd, trading as Effective Supermarket Services – used deliberate tactics to “intimidate” its workforce in the NSW border town of Albury.

Magistrate Burchardt found that the sole director and shareholder, Nick Iksidis, “exploited vulnerable employees”.

“Mr Iksidis chose a workforce that he knew or suspected would be pliable and bullied them if they complained,” he said.

Magistrate Burchardt found that when employees queried their pay rates, responses from the company were “aggressive, offensive and threatening”.

The Workplace Ombudsman prosecuted the company after its investigators found the Melbourne-based company had underpaid 42 of its trolley collectors more than $102,000.

The Workplace Ombudsman found that in some cases, trolley collectors worked more than 50 hours a month of unpaid work.

It told the court that in the main, trolley collectors were from non-English speaking backgrounds, young people and employees with mental, intellectual and/or physical disabilities.

The Workplace Ombudsman said the work was unpleasant, physically demanding and dangerous.

It was not the first time Xidis has been in court for underpaying trolley collectors. In December, the Melbourne Magistrate’s Court fined the company $25,000 after it allegedly underpaid three Melbourne trolley collectors $3500.

In an eight-page judgment in the Federal Magistrate’s Court in Melbourne last week, Magistrate Burchardt said the company’s latest treatment of its employees was “wrong”.

“This was a case involving a number of disabled people. All the employees involved in this sort of work were likely to be vulnerable to a greater or lesser extent,” he said.

“Supermarket trolley return is, after all, scarcely at the top of the employment pecking order. It is reasonable to suppose that those doing this work were desperate for the employment.

“They were given deliberately confusing contracts of employment and bullied if they stood up for their rights”.

Magistrate Burchardt did not believe the company had hired disabled employees “unwittingly”.

“I also accept that the employees were given contracts of employment of considerable complexity … governing matters totally irrelevant, such as ownership of inventions and the like … not inadvertently, but as part of a general tactic by the employer to intimidate,” he said.

“I further accept that responses to queries made by employees as to their rates of pay were met by aggressive, legally oriented and threatening correspondence.”

Magistrate Burchardt said the responses were “totally inappropriate and designed to stifle complaints”.

He said the company’s contraventions of the Workplace Relations Act involved “substantial amounts of money which would have been enormous to employees earning low wages”.

“It is apparent that this is an industry with what might be described as widespread problems,” he said.

Summing up, Magistrate Burchardt said a $120,000 penalty was “just and appropriate” and should not impose a “crushing burden” on Iksidis.

Workplace Ombudsman Nicholas Wilson said the penalty was yet another example that the community and the courts would not tolerate abuses of vulnerable workers.

“We rely on encouraging voluntary compliance with workplace laws, but we will be tough where we need to be,” he said.

“All businesses, small and large, have an obligation to meet minimum employment standards, and their employees have an expectation that this will occur.”

Breaches of the Workplace Relations Act carry a maximum penalty of $33,000 each.

The Workplace Ombudsman recovered almost $39,000 for 206 trolley collectors in a national campaign earlier this year.

In other related action:

  • Victorian company Lonah Pty Ltd - trading as Wyles Supermarket Services – was fined more than $12,000 in the Melbourne Magistrate’s Court in May for underpaying two of its Bendigo trolley collectors almost $25,000
  • Two directors of the South Australian trolley-collecting company Risborg Services Pty Ltd were fined $26,070 for underpaying 130 casual staff  around $170,000, and
  • Adelaide trolley-collecting company M&K Angelopoulos Pty Ltd is being prosecuted for allegedly underpaying five workers about $28,000.

Since March 2006, the Workplace Ombudsman has recovered $52.7 million in back payments for a total of 47,655 workers. Penalties imposed by courts on employers prosecuted exceed $2 million.

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