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Fines sought in one of Australia’s worst cases of wage theft and worker abuse at a Canberra business are well below penalties the managers could face under the Closing Loopholes bill currently before Parliament.

It has been reported today that a director and a manager of former massage business Canberra Foot & Thai are facing penalties of up to $220,000 and $40,000, on top of a $1.14 million fine for the business.

The seven workers involved are yet to see a dollar of the approximately $900,000 they are owed five years after the case was launched.

The Closing Loopholes Bill criminalises wage theft and hands greater penalties to those who steal workers’ wages.

“The financial penalties facing these directors do not reflect the extent of their wage theft offending and fall well below penalties available if the Closing Loopholes bill were to pass,” Jo Schofield, the National President of United Workers Union, said today. “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. Even now, with the company in liquidation there is scant likelihood they will see a cent.”

“We are disappointed Senator David Pocock has failed to support the Closing Loopholes bill in its entirety to better address wage theft and implement other measures to protect workers. Business has too much power, whilst workers continue to suffer. It is time for Senator Pocock to listen closely to the most vulnerable in his community.”

The original statement of claim was filed in 2018 by the Fair Work Ombudsman. In 2021 the Federal Court of Australia ruled in favour of seven former employees of Canberra’s Foot & Thai Massage who were threatened with either being returned to the Philippines or having their families killed if they reported the business to the authorities.The judgment supported workers’ evidence that both the director, Colin Kenneth Elvin, and a manager of the business, Jun Millard Puerto, threatened to kill workers’ families, with Mr Puerto telling some of the workers:

“If you ever talk about your salary or the work you’re doing in the shop, I will get someone in the Philippines to kill your family. I have so many connections in the Philippines. My friend kills people as his job and it will only cost me10,000 pesos ($250) to get him to kill someone for me.”

The court found the business exploited workers’ vulnerability as temporary visa holders, forcing them to be available at any time across 12 hours on the six days they worked. They were paid below award rates, and not paid overtime or public holiday rates. The business also forced six of the massage therapists to pay “cashbacks” to the business from their wages.

In a joint statement Delo Be Isugan and Mayet Ortega, two of the former massage therapists, said: “We came here because we believed Australia could offer us a better life. Instead, we experienced frightening, inhumane treatment. We regained our voices, but no one should have to experience what we went through or how long wehave waited for justice.”

Ms Schofield added: “These brave women stood together to overcome their fears of reprisal, threats of deportation and even threats to their families’ lives to join their union and make their voices heard. It shouldn’t be so hard for workers in Australia to hold employers to account. Their story demonstrates that the system is broken and that change is urgently needed. The Closing Loopholes Bill will criminalise wage theft, as well as increase job security, make workplaces safer, and help get wages moving again.”

The Closing Loopholes Bill includes measures to address serious, intentional wage theft including:

  • Under new criminal provisions for intentional wage theft, fines of up to $1.6 million for individuals or $7.8 million for corporations – or fines of three times the underpayment amount, if that is greater. Persons involved can also face up to 10 years imprisonment.
  • Under beefed up civil penalties for breaches of the Fair Work Act, lift fines available for individuals from $187,800 to $939,000 for serious contraventions, or from $18,780 to $93,600 otherwise. Companies could be fined by a court five times these amounts.