Another penalty against salon operator

16 May 2016

A former salon on the NSW Central Coast has become the latest business operated by NSW businessman Nelvin Nitesh Lal to be penalised for short-changing young employees.

Lal's company, The House of Color @ Tuggerah Pty Ltd, formerly operated a hairdressing salon at the Westfield Shopping Centre in Tuggerah.

It has been penalised $23,500, or 92 per cent of the maximum available to the Federal Circuit Court, following legal action by the Fair Work Ombudsman.

The penalty follows the company’s failure to back-pay three underpaid hairdressing employees a total of $3620.

The Court has also ordered The House of Color @ Tuggerah to back the employees in full.

Last year the Fair Work Ombudsman secured Court-imposed penalties totalling $162,000 against Lal and three hairdressing salons he formerly operated for breaches including underpaying four employees a total of more than $6000.

Those salons were NSW Central Coast business Hair Industrie Erina Pty Ltd, Sydney business House of Colour @ Hurstville Pty Ltd, and NSW South Coast business The House of Colour @ Shellharbour Pty Ltd.

In 2015, the Court also imposed an injunction restraining Lal and any businesses he operates from underpaying any staff employed in the future.

The latest breaches do not contravene the injunction because they occurred before it came into effect.

In the latest case, three employees of The House of Color @ Tuggerah Pty Ltd, including an apprentice aged 23 and two workers aged 24 at the time, were not paid accrued annual leave entitlements on termination of their employment in 2014.

The Fair Work Ombudsman investigated after the employees lodged requests for assistance and issued Compliance Notices requiring the underpayments to be rectified within 21 days.

In his judgment, Judge Nicholas Manousaridis found that Lal’s business had shown “disregard” for workplace laws by making no attempt to comply with the Notices.

Judge Manousaridis said the "not insignificant" underpayments had affected young employees reliant on minimum entitlements and no contrition had been expressed.

"The penalty, therefore, should... signal to the community that contraventions of the Fair Work Act in these circumstances will be punished at the upper end of the scale and thus serve as a deterrent to other employers from contravening the Fair Work Act," he said. 

Fair Work Ombudsman Natalie James says underpayment of young workers is a persistent issue in the hair and beauty industry and the successful legal actions send a message to employers that short-changing employees is a serious matter.

"Young workers can be vulnerable if they are not fully aware of their rights or are reluctant to seek help, so we place a high priority on taking action to ensure their rights are protected," she said.

"We understand that inadvertent underpayments can occur and our preference in those situations is to assist employees to back-pay employees and correct their systems to ensure they comply in future.

"However, we are prepared to take enforcement action in situations where employers refuse to co-operate with our inspectors and rectify their compliance issues.

"Enforcement action also helps to ensure a level playing field for employers who are doing the right thing and meeting their workplace obligations."

Ms James says the injunction had been obtained against Lal to deter him from underpaying workers in future.

Lal could potentially face contempt of court proceedings for any further underpayments proven in Court.

"We have received a number of requests for assistance from young, vulnerable workers at Lal’s salons over the years and we have been concerned about the pattern of non-compliant behaviour," she said.

The Fair Work Ombudsman has a range of free tools available at www.fairwork.gov.au to help employers comply with workplace laws.

Online tools include calculators to assist employers and employees determine the correct award and minimum wages for their industry, templates for time-and-wages records and an Online Learning Centre with free interactive courses.

There are also Best Practice Guides on a range of topics, including an employer’s guide to employing young workers.

Ms James says the Fair Work Ombudsman is making compliance easier for businesses by continually building on the information available on its website.

“Small businesses often don’t have the benefit of in-house human resources and payroll staff, so we place a high priority on assisting them,” she said.

Employers and employees seeking assistance can visit www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94.

An interpreter service is available by calling 13 14 50 and the website also has materials translated into 27 different languages.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.

Media inquiries:

Ryan Pedler, Assistant Media Director
Mobile: 0411 430 902
ryan.pedler@fwo.gov.au

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