A massage parlour which underpaid its workers and threatened to send them back to the Philippines if they complained faces possible penalties of more than a million dollars.
The Federal Court found that Foot & Thai Massage in Belconnen breached the Fair Work Act in the way it treated seven of its masseuses who were in Canberra on temporary work visas.
The Fair Work Ombudsman has told the court it wants a penalty of $1.4 million for the business itself (which has since gone into liquidation) and for the men who ran the parlour.
A spokesman for the Ombudsman said this broke down as:
- Foot and Thai Massage Pty Ltd (in liquidation) - $1,140,450
- Parlour director Colin Elvin - $222,780
- Supervisor Jun Millard Puerto - $41,160
The $1.4 million penalties would be on top of back pay of the money taken from the women by the employer, estimated to be about a million dollars. The final decision on sums is expected to be made by the judge in the new year.
But the women's union said the penalties would not compensate the workers adequately. They will be lucky to see the money.
"Even now, with the company in liquidation there is scant likelihood they will see a cent," Jo Schofield, the national president of the United Workers Union, said.
"The current cumbersome mechanism has taken five years before these women receive any recognition of the full amounts owed for what is one of Australia's worst cases of wage theft.
"It's a tribute to these women they have risen above a broken system and are getting on with their lives, but it shouldn't have to be this hard."
The court found the massage parlour didn't pay the women the rates they were entitled to, including the minimum hourly rate.
The Fair Work Ombudsman said when the case was brought:
- "the seven workers were required to work an average of 65 to 68 hours per week - generally working from 9.45am to 10-10.30pm six days a week - but were generally paid for only 38 hours a week.
- "six of the employees were also required to pay $800 per fortnight of their wages back over a nine-month period when the owner deemed the shop was not getting enough income and customers.
- "the workers were provided with accommodation at a house in the suburb of Higgins, where the gates were locked overnight in an attempt to curtail their movement outside work hours.
- "they were allegedly transported from the Higgins property to the massage parlour and back in a van each working day."
The court heard that the workers were told that if they complained their families in the Philippines would be killed.
One of the workers, Delo Be Isugan, said that when she went to the Philippines in 2019, a motorcyclist with a full-face helmet parked in front of her and a friend.
"I was scared, I thought they were going to shoot us. I held my friend and said 'let's get away, let's please go'," she said.
The court found the parlour, which was wound up in August 2019, did not pay workers their various entitled rates and forced them to be available at any time across 12 hours on the six days they worked between 2012 and 2016.
Tougher penalties on employers who short-change their workers on pay are proposed in the Albanese government's Closing Loopholes Bill which is currently going through Parliament.
It's part of the government's series of reforms to industrial relations law, and opposed by the Coalition.
Under it, penalties of companies and the directors who committed what the unions call "wage theft" would be dramatically increased.
Senator David Pocock has proposed his own measures because of doubts over some aspects of the Labor bill.
The United Workers Union said it was "disappointed" that Senator Pocock had failed to support the bill in its entirety.
"Business has too much power, whilst workers continue to suffer," Jo Schofield said.
"It is time for Senator Pocock to listen closely to the most vulnerable in his community."
There is no suggestion that anyone now working at the massage parlour or in any business which has taken it over was involved in the treatment of the masseuses.
