Published 26 June 2016
AIMG BQ Pty Ltd was ordered to pay $272,850 in pecuniary penalties and the director of the company was ordered to pay $8,160 in pecuniary penalties by the Federal Circuit Court of Australia for denying two employees minimum entitlements.
AIMG BQ Pty Ltd (AIMG) contravened 20 separate provisions in the Fair Work Act (2009) during the employment period of Shen and Ma. These contraventions included, but were not limited to, failing to pay minimum rates, failing to pay leave, failing to issue payslips within one day of payment and failing to comply with a notice to produce.
Jiang was a director of AIMG and submitted he was ‘directly or indirectly, knowingly concerned in or a party to; or otherwise involved in’ AIMG’s contraventions and therefore he was seen to have contravened the relevant sections of the Fair Work Act (2009).
The Court believed the contraventions were deliberate and likely to be repeated based on the following conduct:
- Complete failure to pay Shen for 180 hours of productive work by classifying her as an intern. This classification was illegitimate as Shen performed productive work during the intern period and this work was the same work she later completed as a paid employee
- Exploitation of Shen as a young student seeking experience
- Failure to provide Shen and Ma with minimum entitlements
- Acceptance of wrongdoing did not occur until over 12 months after the alleged breaches came to the Fair Work Ombudsman
In reference to this conduct, the Court determined any penalty to be applied was required to act as a specific deterrent to ensure no future non-compliance would occur by AIMG, Jiang or any related entities.
The Court also noted the importance of the penalty acting as a general deterrent to ensure the community recognised that employers have a positive obligation to their employees and they must comply with these obligations.
It was held that an appropriate penalty for each contravention should be at the higher end of the suggested range due to the need to act as a specific and general deterrent. The Court applied a discount of 50% in recognition of AIMG rectifying the underpayment.
It was ordered that AIMG pay pecuniary penalties in the amount of $272,850.
The Court ordered Jiang to pay pecuniary penalties in the amount of $8,160. It also granted an injunction against Jiang for three years restraining him from not contravening workplace laws. This injunction was granted based on the extent of control he has in the relevant corporate entities and the public’s interest in having him comply with the law.
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