$10k penalty for former owner of Adelaide nail salon

30 August 2018

The Fair Work Ombudsman has secured a $10,560 penalty against the former owner of a nail salon in Adelaide for his role in underpaying several employees.

The Federal Circuit Court imposed the penalty against Albert Tran, who was formerly the director and owner of Hongyen Pty Ltd (now in liquidation), which traded as Citi Nails & Beauty in the Westfield Tea Tree Plaza at Modbury.

Five employees who performed nail treatments at Mr Tran’s salon were underpaid a total of $7,493.

Judge Stewart Brown found that Mr Tran was involved as an accessory in minimum hourly rate, casual loading and rostering breaches of the Hair and Beauty Industry Award, and failure to accrue annual leave in breach of the Fair Work Act.

Most of the underpayment issues relate to one worker who was underpaid $6,346 after being incorrectly classified as a ‘trainee’. This employee was short-changed her minimum hourly rate and leave entitlements between July 2014 and June 2016.

The other four employees were variously underpaid minimum hourly rates, a casual loading and weekend penalty rates for shorter periods between July 2015 and June 2016.

In 2013, the Fair Work Ombudsman had put Mr Tran and his company on notice when a proactive auditing campaign identified non-compliance, resulting in Hongyen Pty Ltd back-paying several employees.

The further underpayments were discovered during a follow-up audit conducted by the Fair Work Ombudsman. Mr Tran’s company back-paid the employees in 2016.

Fair Work Ombudsman Sandra Parker said that the agency will use the accessorial liability provisions to hold business operators to account.

“We consider matters particularly seriously when business operators fail to pay correct wages after being educated about their obligations under workplace laws.”

“This shows a wilful disregard of the law that deserves significant penalties,” Ms Parker said.

In addition to the penalty, the Court also ordered Mr Tran to register with the My Account service at www.fairwork.gov.au and complete the ‘Hiring Employees’ and ‘Managing Employees’ courses in the Online Learning Centre. 

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 on 13 14 50.

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Ryan Pedler, Assistant Director - Media
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