Underpaid teen’s $250,000 windfall

David Marin-Guzman

Feb 10, 2020

AFR

A small business has been ordered to pay almost a quarter of a million dollars to a teenage worker for deliberately underpaying him just $8000.

The Federal Circuit Court fined Melbourne astroturf business Rhino Grass $200,000 and its director $40,000 for refusing to pay the 19-year-old warehouse worker 30 per cent of his wages and ordered both pay the fines to the worker on top of backpay.

The $240,000 fine is unusual relative to the size of the underpayment.  Supplied

Judge Heather Riley said the high penalties were necessary to deter employers generally as well as the business, which failed to appear at the hearing.

“It is important that employers understand that, if caught, it is very expensive to not properly pay employees,” the judge said.

The size of the penalty is unusual relative to the underpayment and could encourage more workers to pursue their own wage claims rather than leave them to the regulator.

The warehouse worker had alleged he was underpaid in 10 out of 18 pay cycles over eight months, as well as public holiday rates, untaken annual leave when he resigned and superannuation for the whole period of his employment.

While his lawyer Andrew White, SC, acknowledged the dollar amounts were “not large”, he argued the conduct was “flagrant and deliberate wage theft”.

The worker’s age – just five months out of high school – aggravated the breaches and Rhino Grass’ failure to provide pay slips “thwart[ed] the vindication of his rights”.

“[He] was a young worker, relatively naive in matters of workplace rights and objectively more vulnerable to exploitation by an unscrupulous employer,” Mr White said.

“There was an element of opportunism to the employer’s conduct.”

The worker told the court he repeatedly raised underpayment concerns with Rhino Grass’ director and his father had also complained on his behalf, including by threatening to take the matter to the Fair Work Ombudsman.

However, the court held the director refused to pay him his full wages, even after acknowledging the proper amount that should have been paid.

The worker said he was eventually forced to quit when he asked a manager why he hadn’t been paid the previous week and she allegedly shouted at him “is that all you care about”.

He said the manager had called him “irresponsible” and directed him to drive a forklift, despite his protests that he did not have a licence.

She then accused him of stealing $30 from petty cash by not giving her the change from a purchase.

When his father later called the manager about her comments she replied that she would call the police over the $30.

The father then drove to the warehouse to pick up his son and when the worker walked out the manager allegedly ran after him screaming that he could not leave because of the stolen money.

His father got out of the car and gave the manager $30 in cash and told her his son would forward his resignation later that day.

Judge Riley held Rhino Grass constructively dismissed the worker as a result of its actions to “save money by underpaying him his entitlements, and by making him, rather than a properly qualified and more expensive person, drive a forklift”.

The judge noted the fines appeared higher than other similar cases because there had been no discount for employer admissions, which can be as high as 30 per cent, due to the business’ failure to appear.

The fines also multiplied because the judge found the underpayments were not just the result of one decision, but many discrete instances.

She ordered Rhino Grass backpay the worker $8088 in salary, interest and super and held it was appropriate the company and its director pay their fines to the worker because “he has gone to the trouble of bringing these proceedings”.