The lawyer representing two Wollongong workers who won a massive payout after their employer systematically ripped them off says the case sets a national precedent as federal parliament debates criminal penalties for similar cases.
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On Thursday morning, Federal court Justice John Halley made a final decision on costs for Wollongong restaurant workers Midhun Basi and Syed Haider who took their former employer to court after what the judge found to be a series of "egregious and flagrant" contraventions of the Fair Work Act.
In awarding total costs in the hundreds of thousands of dollars, Justice Halley said the calculation went beyond the facts of this case.
"I am satisfied that in light of the factors considered below, it is necessary for substantial penalties to be imposed in order to deter the respondents and other employers, particularly in the restaurant industry, from engaging in similar conduct in the future."
Representing Mr Basi and Mr Haider, solicitor Kristian Bolwell said it was the first case that he was aware of where penalties were so high.
"My understanding is it's the first time that the Federal Court of Australia has provided a penalty case of this magnitude," he said.
Normally, wage cases are dealt with in the lower Federal Circuit Court, where payouts are limited, however the wage theft in this case, along with other breaches, was so serious that the case went to the higher court.
Not only did the employer Vaisakh Mohanan Usha, who owned the business Namitha Nakul, which operated two restaurants named Adithya Kerala in Wollongong and Nowra, not pay Mr Basi and Mr Haider the wages they were owed, he engaged in "deliberate and systemic" flouting of his requirements as an employer.
"The contraventions demonstrated a profound disregard of the fundamental obligations of an employer under both the Act and the Award," Justice Halley wrote.
These actions included payments from the employees to cover the business' tax obligations, payments to cover visa sponsorship costs and cashback arrangements for what Mr Usha said were loans but which were never substantiated in legal proceedings.
In slamming the conduct of Mr Usha, Justice Halley noted the particular characteristics of the employment relationship in this case.
"The respondents' conduct in the course of operating the restaurants took advantage of the inherent vulnerabilities of employees on temporary immigration visas who are reliant on the goodwill and sponsorship of their employers," he wrote.
"This [penalty] will ensure that the respondents and other employers seeking to sponsor and employ vulnerable visa holders in the restaurant industry are deterred from engaging in similar conduct in the future."
Lawyers for Mr Usha said their client accepted the decision.
"Our client is disappointed with the outcome of the proceedings in general but accepts the decisions as to liability and penalty," solicitor Brian Gillard said.
South Coast Labour Council secretary Arthur Rorris, who was part of the team that brought the case on behalf of Mr Basi and Mr Haider, said the case went well beyond the restaurants where the wage theft occurred.
"This may be the shortest day of the year, but we have just had the biggest ray of sunshine that's ever been shone on wage theft and the exploitation of international workers," he said,
"It should be a very big warning for employers that they can't hide."
But in this case, it remains unclear whether Mr Basi and Mr Haider will ever see a cent. The business which bears the brunt of the costs order ceased to exist in April last year, and Mr Usha has significant personal debts already.
To avoid this loophole, the federal parliament will consider the criminalisation of wage theft, which would mean employers could face more than financial penalties for wage theft. Consultation papers were released earlier this year, with submissions closing in May.
Mr Bowtell said the message of the judgement was clear, and now it was up to the Parliament to act.
"It's an appropriate penalty for some outrageous underpayments that were occurring in the Illawarra. It is a very strong message by the court that the Australian community does not accept wage theft of this kind," he said.
"It seems there is a problem that the Parliament should step in and fix."
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