Brothels in breach of workplace laws
8 February 2014
Random audits of dozens of Victorian brothels found more than 70 percent in
breach of workplace law, the Fair Work Ombudsman revealed today.
Nineteen brothels - most in metropolitan Melbourne - were found to have
underpaid more than 50 of their staff over $65,000.
The Fair Work Ombudsman decided to check the wages and conditions of clerical
workers after recording a string of inquiries from brothel managers about proper
Inspectors scrutinised the books of 62 brothels after receiving intelligence
that most clerical staff in brothels were likely to be female, from a
non-English speaking background and unlikely to complain about exploitation for
fear of reprisals.
They looked at record keeping and payslips, base rates of pay, weekend
penalties, public holiday rates, overtime rates and shift rates.
Some staff were interviewed to enable inspectors to verify information
provided by brothel owners.
Businesses audited were located in Melbourne's CBD,
western, eastern and northern
suburbs, the Mornington Peninsula, Yarra
Valley, High Country, on the Great Ocean
Road and the Daylesford and Macedon
The targeted campaign followed three-months of extensive stakeholder
engagement with the Australian Adult Entertainment Industry Inc (AAEI).
The Resourcing Health and Education in the Sex Industry (RHED), Australian
Federal Police (AFP), Victoria Police Sex Industry Co-ordination Unit and
Victorian Department of Justice Business Licensing Authority were also
Of the 62 businesses, 44 (71 per cent) collectively were found to have 63
Nineteen premises had collectively underpaid 51 of their employees a total of
$65,508, while others had record-keeping, pay slip and technical contraventions.
The biggest underpayment was $12,800 for 10 employees at a Melbourne brothel
which had underpaid the minimum hourly rate and penalty rates for shift, weekend
and overtime work.
Another at Geelong underpaid five employees a total of $3635 and on the
Mornington Peninsula an operator had short-changed three staff a total of
Some businesses were found to have misclassified employees as independent
Record-keeping contraventions included the failure to include required
information on employee pay slips.
Fair Work Ombudsman Natalie James says that where mistakes were found,
employers worked with her inspectors to rectify them voluntarily.
"The contraventions appear to be genuine errors by employers rather than
deliberate attempts to underpay employees," she said.
When first advised of the proposed campaign, the AAEI made written
submissions to the Fair Work Ombudsman requesting further consideration of the
relevant industrial instrument applicable to reception staff and brothel
As part of its review, the Fair Work Ombudsman sent inspectors to several
brothers to observe the work of managers and receptionists.
It subsequently determined that their work falls within the scope and
classifications of the Clerks - Private Sector Award (2010) - which is an "occupation-based" Modern Award.
"Although receptionists and brothel managers may spend some time undertaking
ancillary duties that are not clerical in nature, the primary purpose of their
engagement is to perform duties which are clerical," the FWO says in its final
report on the campaign released today.
Ms James says that once advised of its decision, the AAEI worked in
partnership with her Agency on a comprehensive information and awareness
strategy to promote understanding and compliance with workplace laws within the
This included the development of a specific website
tailored materials to assist employers.
Materials were also distributed to businesses across the State and the Fair
Work Ombudsman conducted two seminars in English and Mandarin to explain the
Award provisions to employers and their accountants.
Each year, the Fair Work Ombudsman runs national, state and regional targeted
campaigns in specific geographic locations and focused on targeted industry
sectors as part of its pro-active education and compliance program.
Last financial year it audited 5600 businesses throughout Australia as part
of this program.
Earlier this year, the Fair Work Ombudsman announced its first targeted
campaign of 2014 would be audits of 600 fast food outlets throughout the
Since its establishment in March, 2006, the Fair Work Ombudsman (and its
predecessor) have recovered more than $200 million in underpaid wages and
entitlements for 100,000 employees.
Ms James says supporting small business with information and advice on
workplace laws is a high priority for the Agency.
"We are striving to provide accessible, credible and reliable information,
focussing our resources quite deliberately at times on the sectors we believe
need the most assistance," she said.
Employers and employees seeking assistance can
visit www.fairwork.gov.au or call 13 13
94. A free interpreter service is available on 13 14
Download the report:
Follow the Fair Work Ombudsman on Twitter @fairwork_gov_au
or find us on Facebook
Tom McPherson, Media Adviser
Mobile: 0439 835
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