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Cafe fined $73,000 for underpaying workers

A Federal Circuit Court judge has fined the former operators of a Darwin café tens of thousands of dollars for underpaying two Taiwanese backpackers, and issued a strong warning to other rogue employers who seek to exploit vulnerable workers and tarnish Australia's reputation overseas.

"In my view, backpackers and the like are particularly susceptible to being exploited by unscrupulous operators in the hospitality industry," Judge Stewart Brown said when imposing a $73,000 penalty against Darwin couple Peter and Moya Buckley and their company.

"The Court has a responsibility to set penalties which will deter others from engaging in conduct which may tarnish Australia's reputation as a satisfactory place for visitors and tourists to undertake a working holiday," Judge Brown says in a 33-page decision handed down this week.

Legal action against Mr and Mrs Buckley - the former owner-operators of the Java Spice Café Emporium on Mitchell Street, Darwin - followed an investigation by the Fair Work Ombudsman which found the business had short-changed two Taiwanese backpackers in their 20s who were in Australia on 417 working holiday visas.

Earlier this year, Judge Brown ordered the company to reimburse its former employees $5805 and $1605 respectively, but the Court Order was not complied with.

Judge Brown noted that in her complaint to the Fair Work Ombudsman, one of the visa-holders said she wanted to be in a position before leaving Australia to tell other backpackers that their workplace rights would be protected.

"Backpackers are often keen to augment their savings through casual employment. The turnover of workers in the hospitality industry, particularly in tourist areas such as Darwin, is likely to be high," he says.

"Such potential workers are likely to be informally recruited and be unaware of their workplace rights because of their unfamiliarity with the Australian employment context.

"This is a case concerning compliance with minimum employment standards applicable to two highly vulnerable employees.

"In all these circumstances, in my view, the Court needs to send a strong message to the general employer community that such conduct will be subject to significant penalty"

Judge Brown says: "Employers in the hospitality industry need to know that they cannot exploit backpackers or other itinerant employees and expect that their behaviour, if detected by authorities, will not attract a significant penalty."

The Court found that the conduct of Java Spice was "exacerbated by its lack of co-operation" with and "disregard" for the Fair Work Ombudsman.

It was also significant that the company had not taken heed of directions and advice provided to it by the Fair Work Ombudsman in the past.

Judge Brown noted that Mr and Mrs Buckley had not apologised to the workers or shown any contrition for their behaviour. They did not participate in the Court proceedings.

Employers risk penalties of up to $54,000 for each breach of the Fair Work Act 2009.

Most businesses - including small businesses - are now covered by the national Fair Work system created by the Fair Work Act 2009.

Fair work Inspectors appointed by the Fair Work Ombudsman have the power to enter a workplace at any time during working hours to inspect records and ensure compliance: Read more about fines and penalties: Fair Work Act 2009

HR Managers, Directors and people responsible for payroll and administration functions also risk personal fines under Section 550 of the Fair Work Act 2009.

Need help with compliance? Workforce Guardian HR Solutions