NSW petrol retailer fined for underpaying workers more than $500,000

24 December 2010

The operator of a Sydney-based petrol retailer who was centrally involved in underpaying his staff more than $500,000 has been fined a total of $82,100.

The Federal Magistrates Court in Sydney imposed the penalty yesterday on the owner-director of A.M. Retail Solutions Pty Ltd, Adil Magar, following a prosecution by the Fair Work Ombudsman.

Federal Magistrate Matthew Smith found that Magar was responsible for A.M. Retail Solutions’ underpaying 56 console operators more than $514,530 between March, 2006 and May, 2008.

The Fair Work Ombudsman was unable to continue legal action against the company after it was placed in liquidation in May, 2009.

A.M. Retail Solutions Pty Ltd operated more than 20 Volume Plus petrol stations in Sydney and regional NSW.

Fair Work inspectors discovered the underpayments when they investigated complaints from five workers at the company’s petrol station at Holbrook.

Inspectors then initiated a full audit of six of A.M. Retail Solutions petrol stations in Holbrook, Ruse, Ingleburn, Lewisham, Woolooware/Cronulla and South Bathurst.

(Volume Plus petrol stations in NSW not owned by A.M. Retail Solutions were not part of the investigation.) 

Many of the underpaid workers were non-English speaking migrants, some of them young workers under 21.

Most of the underpayments remain outstanding.

The workers were underpaid their minimum hourly rate, penalty rates and loadings and failed to receive annual leave and termination entitlements.

Handing down his decision, Federal Magistrate Smith said he had taken into account Magar’s response to the Fair Work Ombudsman investigation and its subsequent court action.

“Magar and his company adopted strategies of delay, avoidance, misrepresentation and cover-up … in attempts to stall the investigations,” Federal Magistrate Smith said.

“I certainly can find no expression of regret … nor any genuine intention to rectify the underpayments …

“I am not satisfied that he (Magar) appreciates, or will ever appreciate, the obligations on a sole director or proprietor of a business … to observe Australian laws governing the payment and recording of employees’ entitlements.

“If I assume that the disregard of Award entitlements enabled A.M. Retail to compete successfully against multinational petrol retailers, then this competitive edge was obtained in a manner which cannot be tolerated or excused.

“Magar’s involvement … reflects a high degree of culpability. At the highest level is his falsely instructing the company’s solicitor to deny the availability of essential employment records.”

Federal Magistrate Smith said it appeared that Magar thought he could adjust the wage rates of his employees at his “complete discretion.”

“Magar regarded all his employees as persons whom he could exploit for the financial benefit of his company through an astute appreciation of their vulnerabilities and in disregard of their legal entitlements,” he said.

“… he (Magar) exploited a culture of patronage and the weakness of recently-arrived migrants”.

Fair Work Ombudsman Executive Director Michael Campbell says the penalty sends a clear message to company directors that they cannot get away with deliberately breaching workers’ rights and then expect to avoid their responsibilities by winding up the company.

“This director tried to cut costs by short-changing its employees, but has now been saddled with a significant fine,” Mr Campbell said.

“Successful prosecutions such as this also benefit employers who are complying with workplace laws because it helps them to compete on a level playing field.”

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au. For translations call 13 14 50.

Media inquiries:

Craig Bildstien, Director, Media & Stakeholder Relations,
0419 818 484

Richard Honey, Adviser, Media & Stakeholder Relations,
(03) 9954 2716, 0457 924 146

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