Overworked and underpaid? Are you being paid enough?

July 22, 2019

After the SA Employment Tribunal recently ordered an employer to pay in total over $170,000.00 to an employee who had been exploited and underpaid, many workers are asking, “Am I being paid what I’m entitled?”  As this and other recent cases have shown, the number of Australian companies being found responsible for skimping on worker entitlements is growing.  And many employees classified as casual workers are investigating whether they are actually entitled to be treated as permanent employees with annual leave and other benefits.

Australia is supposed to be a safe haven for workers, with comprehensive National Employment Standards, Awards for all types of skills and a minimum wage rate which is competitive in the international working arena.

Yet with all of the protection the Australian Government unwaveringly proposes, Australia’s employment lawyers are still discovering new ways that businesses have been cashing in on unsuspecting workers.

The fact is that workers are, as a whole, a vulnerable bunch. They’re often not fully informed of what entitlements they are owed by law, and are happy to have found gainful employment in a competitive job market.

Vulnerable Worker Awarded Over $170,000.00

As the recent case involved Rajesh Salaria shows, it is a sad truth that vulnerable workers (for example, young, disabled or immigrant workers) are a target for unconscionable businesses. These workers often have less experience in the Australian work force and so may not understand what payment they are due, even if they are being trained or are on probation.

Mr Salaria came to Australia to make a better life for himself in a country he understood to have better working conditions and a minimum wage on which he could support his young family.

Instead, he was snapped up by an Adelaide restaurant company who falsely informed him that before he could make money as an employee, he would be required to work part time and be paid nothing whilst he learned how to cook Indian food. He was told that this was training, and once completed he could get full time employment with pay in addition to visa sponsorship.

He worked for this company for approximately 10 months at 20 hours per week with no pay at all. He was eventually taken on as a full time worker, but was required to “pay back” thousands of dollars to his employer for “sponsorship fees” which reduced his minimum wage salary of $18.93 per hour to $7.00 per hour.

Mr Salaria was unable to support his family on this salary but did not wish to stop working for the restaurant company as he was afraid of his visa being cancelled. He turned to taxi driving as a way to supplement his income, thereby violating his visa conditions and risking his deportation. After he was made redundant by the company, Mr Salaria brought a claim for unpaid monies.

The matter came before the South Australian Employment Court, where the Court found in favour of Mr Salaria’s claim for unpaid wages, underpayment of wages, unpaid leave, unpaid superannuation, unpaid notice and repayment of the “sponsorship fees” all totalling over $86,000.00.

The Court saw the company’s breach of employment standards as being so serious that in May 2019 it ordered an additional $83,600.00 be paid to Mr Salaria in penalties alone.

Unfortunately Mr Salaria’s story is not an uncommon one. Unpaid wages and entitlements are rife in companies taking on students, immigrants and young people for free labour in exchange for experience. The Courts are also finding that new-age “Gig-workers” are often classified as contractors to avoid the benefits bestowed upon employees. Now more than ever, workers not conforming to the traditional approaches to employment should understand their vulnerability and seek advice as to what they should be receiving for their work.

‘Casual’ Workers Being Underpaid

When it comes to employees who don’t work full time, a favourite trick of some employers is to misclassify them as casual employees rather than permanent employees.  In fact, many workers engaged for ‘full time’ hours are still employed as ‘casuals’.

You can see the allure. Permanent employees not only enjoy the benefit of guaranteed work at set times, but also the following entitlements:

  • Paid annual, personal, parental leave;
  • Long service leave;
  • Superannuation; and
  • A set notice period if their employment is terminated.

Meanwhile, casual employees are not guaranteed regular work or regular working hours, and receive the following, less cushy entitlements:

  • Unpaid carers leave (2 days per occasion);
  • Unpaid parental leave;
  • Unpaid adoption leave(2 days per occasion);
  • 2 days compassionate leave per occasion;
  • Community service leave (except paid jury service);
  • Superannuation guarantee; and
  • A day off on public holidays unless a work day has been arranged between the worker and the employer.

Though causal employees are required to be paid a casual loading (around 25% depending on the applicable Award), the above lowered benefits can mean a lot less cash leaving the employer’s pocket.

But how can you tell what kind of employee you are? Looking at your contract or asking your employer does not seem to be the answer here according to the recent cases emerging from the Courts in relation to misclassification of employees.

Though there are a range of things which can help to demonstrate an employee’s status, the stand-out factor is how often the employee works and how regular their working schedule is.

A prime example of this is the case of an employee who was told that he was a casual labour hire worker not entitled to annual leave payments.

Mr Skene was a dump truck operator for WorkPac Pty Ltd. He worked a continuous roster arrangement of seven days on, seven days off, with 12.5 hours per shift. He was provided with each year’s roster in advance, and was employed from July 2010 to April 2012. When Mr Skene was dismissed in 2012, he brought a claim that he was a misclassified permanent full-time worker and was accordingly due payment in lieu of annual leave.

The first round of the case was found in Mr Skene’s favour; despite his job status of casual team member, his regular and predictable working hours demonstrated he was a permanent employee. This finding was appealed, and the Full Federal Court was called on to decide the matter. Once again, a finding was made in favour of Mr Skene, this time setting out the below critical explanations for identifying Mr Skene as a permanent employee.

  1. Mr Skene’s enterprise agreement did not describe him as a casual employee.
  2. Mr Skene’s flat rate of $55.00 per hour was not described as inclusive of a casual loading. Even if it was found that this amount did include a casual loading, it could not demonstrate that no annual leave was to be paid. Annual leave is not just a financial benefit; it is about resting an employee.
  3. The ‘absence of a firm advance commitment as to the duration of the employee’s employment or the days or hours the employee will work is the essence of casualness’ and Mr Skene’s employment arrangement lacked this ‘casualness’.

The employer’s appeal was dismissed, and the case was remitted to the Federal Court to determine what exactly was payable to Mr Skene.

It is important that casual employees learn from this case and remember that their classifications are not determined by what their employers label them but by how they undertake their work. In connection to this, casual employees should be aware that as of 1 October 2018, casual employees in Australia who have worked regular hours for at least one year may apply to their employers for permanent positions and must have these applications be taken seriously by their employers.

Still Not Sure? Give Us A Call.

The common element with this cases is that workers are often not aware of what they are entitled to until they are terminated and seek legal advice.

This advice is not reserved for workers who have already suffered a loss. Any worker who has been provided with a contract to sign, who is uncertain of their correct wage, who is having trouble in their workplace or who hasn’t been made aware of their leave and allowance entitlements should seek legal advice.

Websters Lawyers have specialist employment lawyers ready to assist you with a free first consultation.  If you think you might not be getting paid correctly, call us on 8231 1363 or contact us here.

Salaria v Sharma [2019] SAET 98

Salaria v Trehan & Sharma Pty Ltd [2018] SAET 226

WorkPac Pty Ltd v Skene [2018] FCAFC 131