Court penalises IGA operator over $320,000

By Nick Hall | 25 Oct 2018 View comments

Over $320,000 in penalties has been secured in court after an investigation by the Fair Work Ombudsman (FWO) found an IGA operator in Melbourne had deliberately underpaid workers, despite having already been put on notice to comply.

Said ‘Sam’ Haddad, operator and majority owner of the Fairfield IGA Supermarket, and former majority owner of the Altona IGA Supermarket was penalised $53,377 in the Federal Circuit Court for the breaches.

Haddad admitted to underpaying six workers a total of $11,373 between November 2013 and November 2015, resulting in penalties of $157,950 and $108,936 for the two companies he is a shareholder and director of; D_jö Vu Elite Security Pty Ltd and Hadya Nominees Pty Ltd.

The underpayments occurred despite the FWO having previously investigated the business, following a request for assistance by workers.

After the initial concerns were raised, the FWO provided Haddad with information regarding his obligations to pay minimum lawful rates of pay, however, as the court determined on Monday, the warnings fell on deaf ears.

Inspectors discovered that two employees at the Altona IGA had been underpaid a total of $7466 and that four employees at the Fairfield IGA had been underpaid a total of $3907.

An investigation revealed that employees were paid flat rates ranging from $15 to $20, far below the minimum requirements set out under the General Retail Industry Award for hourly rates, casual loadings, overtime rates and penalty rates for evening, weekend and public holidays.

In one instance, a worker was not paid at all for a day of work, however all employees have since been back-paid.

Sandra Parker, Fair Work Ombudsman said Haddad’s decision to underpay workers despite having previously been put on notice highlighted the callous nature of non-compliance.

“All employers have a clear obligation under Australia’s workplace laws to pay correct wages and entitlements and rectify any underpayment of their employees. If companies do not improve compliance with workplace laws, we will take court action to enforce the law,” Parker said.

“The underpayment of young workers is particularly serious as they can be unaware of their workplace rights or reluctant to complain. The Court’s significant financial penalties serve as a warning for all businesses who fail to act on our advice about workplace laws.”

In addition to the outstanding underpayments, Haddad and D_jö vu Elite Security Pty Ltd were also found to have falsifyied documents, by manufacturing pay records that indicated employees had been paid the correct wages when they had not.

Judge Heather Riley deemed that the breaches were deliberate, and ordered D_jö Vu Elite Security Pty Ltd to pay $11,616.90 in legal costs to the FWO and ordered Hadya Nominees to make outstanding superannuation contributions for two workers.

“It seems to me that the conduct of the respondents in this case was egregious. It was deliberate. There has been no apology to the employees affected by the respondents’ conduct,” Judge Riley said.