“Egregious” business owner slapped with $226k penalty

097BusinessOwnerSlappedWith$226kPenaltyA court has penalised a business owner more than $226,000 for their “sheer belligerence” in refusing to take responsibility for underpaying a former employee. The case is one of a number recently where the Fair Work Ombudsman (FWO) has pursued business owners seeking penalties for where they have underpaid workers.

The FWO pursued Siner Enterprises Pty Ltd and its co-director Simon Mackenzie for a list of contraventions, including failure to pay Gurprit Singh minimum wages, penalty rates and leave over four months in 2012.

Federal Circuit Court (FCC) Judge Antoni Lucev had found the employer guilty of 14 contraventions advanced by the FWO in a decision on October 26, 2017.

Judge Lucev found restaurant-owner Mackenzie guilty of taking adverse action against Singh, a former cook, by sacking him via text message because he exercised a workplace right to use personal leave.

Judge Lucev said the text messages contained “atrabilious outbursts”.

In the penalty decision Judge Lucev said: “The circumstances of the termination of employment of Mr Singh are of course aggravated by the manner in which that was carried out by Mr Mackenzie (including the fact that it was effected by way of text messages), and the manner in which Mr Mackenzie conducted himself in so doing.”

Employer texts “I’m gonna kill u”

In one text message, Mackenzie called Singh a female body part and in another he said “Im gonna kill u” after there was a problem with the work alarm.

Singh was dismissed after he texted Mackenzie that he was sick and had a medical certificate.

Mackenzie replied “for that goodluck. Dont come back”.

Judge Lucev said Singh’s termination was “more egregious because of the manner in which it was carried out”.

Singh, an Indian citizen, was unable to obtain a sponsored work visa due to the adverse action of his employer, the court said.

‘Grossly inaccurate’ timesheets provided

The court found Mackenzie provided inaccurate timesheets for Singh, and did not maintain proper employment records.

The employer admitted the timesheets “aren’t 100% accurate”, but the court found they were “so grossly inaccurate as to be wholly unreliable”.

Mackenzie was found to have provided the FWO with documents that “he knew to be inaccurate”.

Judge Lucev said on a “number of occasions” the failure to produce documents had been considered more serious than the failure to pay entitlements.

This was “because the failure to produce documents prevents both the FWO and the employee from carrying out investigations to determine whether or not an employee has been paid entitlements”, he said.

No remorse leads to higher penalty

Mackenzie refused to take responsibility for the wage underpayments, telling the court “there will be no apology at all”.

Judge Lucev said Mackenzie’s attitude in the penalty hearing was “cause for serious concern” in relation to future employment by him or any company he was associated with.

“The ongoing denial of liability and the unsubstantiated assertions concerning the conduct of Mr Singh, together with the sheer belligerence exhibited by Mr Mackenzie before the court, renders this a case in which specific deterrence is a greater factor in fixing penalty,” he said.

Judge Lucev said the court “should mark its disapproval” of Mackenzie’s conduct, by setting a penalty that “serves as a warning” to other restaurant industry employers.

He said, if not for the FWO intervening, Singh would have remained unpaid and the employer may have “ignored both the consequences of their actions and any loss or damage sustained by Mr Singh”.

The court heard Mackenzie had failed to pay Singh the amount Judge Lucev ordered the employer pay in October last year ($12,075.62 less tax).

Mackenzie maintained he did nothing wrong and even accused Singh of being involved in “events, or events which led to, the burning down of the restaurant”, Judge Lucev said.

The FWO submitted the penalties should be up to $207,900 for Siner Enterprises, and up to $41,580 for Mackenzie, considering no remorse was shown by the employer and Singh’s underpayments had not been rectified.

Judge Lucev penalised Siner Enterprises $174,075 and Mackenzie $34,815, as he said the contraventions fell within “mid-range” penalties of 40-70%.

The FWO sought more than $27,000 in compensation for Singh, due to economic loss after losing his job, and costs arising from the lost work sponsorship visa.

Judge Lucev said the visa connection was “not readily apparent”, and ordered Siner Enterprises and Mackenzie to pay Singh $17,885.38 in compensation.

(Fair Work Ombudsman v Siner Enterprises Pty Ltd & Anor (No.2), FCCA 589 15/03/2018)