The Fair Work Ombudsman has commenced legal action against a Queensland labour hire business and sweet potato farm, alleging it unlawfully deducted money from migrant employees including for breaching its alcohol policy. Facing court is McCrystal Agricultural Services Pty Ltd and sole director Russell McCrystal.
The company operates a farm west of Bundaberg at South Kolan, and is an approved employer under the Pacific Australia Labour Mobility (PALM) scheme, which consolidated the Seasonal Worker Programme (SWP) and Pacific Labour Scheme (PLS).
The Fair Work Ombudsman alleges the company put in place a policy to fine employees $500 for breaches of the company's alcohol policy, which stated there was zero tolerance for workers being under the influence of alcohol while staying on work site accommodation. Between January and March 2022, 29 employees faced fines under the alcohol policy, totalling $14,500. Most of these impacted employees were living in accommodation on the farm.
It is also alleged that the company deducted $2.50 more per week than the cost of the health insurance premiums obtained for the employees (a visa requirement), resulting in deductions, between November 2021 and March 2022, of $47.50 each for 27 of the company's full-time employees, totalling $1,282.50.
In addition, the FWO alleges that after overpaying 28 casuals for overtime in error in August 2021, the company then deducted, without the employees' approval, $2,548.60 from the employees' wages to recover the overpayments in the following pay period.
In total, the FWO alleges that McCrystal Agricultural Services unlawfully deducted $18,331 from 66 employees who were covered by the Horticulture Award 2020, for work performed between August 2021 and March 2022. As part of the deductions related to overpayments, the FWO alleges that the total underpayments were $15,782 to 39 different employees.
The Fair Work Ombudsman alleges the deductions breached section 324 of the Fair Work Act as the deductions were not principally for the benefit of the employees, and were not otherwise lawfully authorised. Further, the overtime overpayment deductions were not authorised in writing. In some instances, employees were left with only about $150 net pay in a particular week following deductions, including the allegedly unlawful alcohol policy deductions.
The farm workers, who were from Vanuatu, performed tasks such as cutting and sorting sweet potato vine into bundles; planting and packing sweet potatoes; weeding; general farm hand tasks; and constructing boxes for packaging.
Fair Work Ombudsman Anna Booth said the litigation highlighted the importance the workplace regulator places on the rights of visa holders. "Acting to protect visa holder workers and ensuring compliance across the agriculture sector are priorities for the Fair Work Ombudsman," Ms Booth said.
"That focus includes ensuring any deductions from the wages of vulnerable PALM scheme workers are lawful and appropriate. We will hold employers to account. Deductions are lawful in a limited range of situations, and employers must understand those laws. We have a range of information to help employers get it right. The visa holder workers allegedly underpaid in this case were only in Australia for a limited period and were highly reliant on their employer. Any employees with concerns about their pay or entitlements should contact the Fair Work Ombudsman for free advice and assistance." she mentioned.
The FWO investigated the employer proactively because of its status as an approved employer under the scheme.
The Fair Work Ombudsman is seeking penalties against McCrystal Agricultural Services Pty Ltd and Mr McCrystal for alleged contraventions of the Fair Work Act. The company faces penalties of up to $66,600 per contravention and Mr McCrystal faces a penalty of up to $13,320. A directions hearing is listed in the Federal Circuit and Family Court in Brisbane on 3 February 2025. The employer rectified the underpayments as they were identified by the FWO, with all payments made, and proactively amended its alcohol policy to remove the fines.
For more information:
Matthew
Fair Work Ombudsman
414 La Trobe St,
Melbourne VIC 3000, Australia
Tel: +61 0466 470 507
Email: [email protected]
Website: www.fairwork.gov.au