Hairdressing operator fined $162,000 over underpayment of young salon employees

16 April 2014

The Federal Circuit Court has imposed an unprecedented injunction restraining a NSW hairdresser from underpaying any staff he employs in the future.

The Court has also imposed penalties totalling $162,000, following legal action initiated by the Fair Work Ombudsman.

Nelvin Nitesh Lal, who formerly ran hairdressing salons in Sydney and on the Central and South Coast of NSW, has been fined $20,000.

In addition, penalties amounting to $142,000 have been imposed against Lal’s businesses, including:

  • $80,000 against NSW Central Coast business Hair Industrie Erina Pty Ltd,
  • $40,000 against Sydney business House of Colour @ Hurstville Pty Ltd, and
  • $22,000 against NSW South Coast business The House of Colour @ Shellharbour Pty Ltd.

Following unprecedented action by the Fair Work Ombudsman, the Court has also issued an Order restraining Lal from underpaying any hairdressing employees he recruits in the future.

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

Acting Fair Work Ombudsman Michael Campbell says the injunction was sought in response to the Agency’s concern about a pattern of non-compliant behaviour.

The Agency has received a number of requests for assistance from young, vulnerable workers at Lal’s salons.

“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,” Mr Campbell said.

The Court found that four employees had been underpaid a total of more than $6000, including:

  • An employee aged in her early 20s at Hair Industrie Erina, underpaid $4189 as a result of being paid a flat weekly rate regardless of the hours she worked, which resulted in underpayment of her minimum wages and weekend and overtime penalty rates,
  • An employee at House of Colour @ Hurstville paid nothing for seven days of work, but entitled to receive $1224 in wages and entitlements, and
  • Two employees at Shellharbour underpaid a total of $765, including a 19-year-old employee unlawfully being paid nothing for two full days of work performed on a trial basis and an employee in her early 20s paid only $250 for five full days of work.

The underpayments occurred at various periods of time between June, 2012 and September, 2013.

Workplace laws relating to issuing of payslips and responding to a Compliance Notice were also breached.

The Court has ordered Lal’s companies to rectify the underpayments of the workers, who have not received any back-pay.

Mr Campbell says Fair Work inspectors made extensive efforts to engage with Lal before placing the matter before the Court.

“Unfortunately, we were not able to secure sufficient co-operation, which is not acceptable,” he said.

“Our preference is to seek to work with employers to resolve issues co-operatively, but we will consider enforcement action when employers refuse to engage with inspectors.”

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.

Mr Campbell 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,” he said.

“Equipping people with the information they need helps to create fair and productive workplaces, as well as ensuring a level playing field for all.”

Employers and employees seeking assistance can also contact the Fair Work Infoline on 13 13 94. A free interpreter service is available by calling 13 14 50.

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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