KLM Foods, operator of two Tasmanian United Petroleum outlets, fined for underpaying workers

A company operating two busy Tasmanian petrol stations has been hit with a big fine after it was found to have knowingly underpaid four migrant workers.

United Petroleum outlet in Kingston. Picture: Supplied/Google

The operator of two Tasmanian petrol stations has been fined nearly $180,000 for underpaying four migrant workers, the Fair Work Ombudsman says.

The workers at the United Petroleum outlets, operated by KLM Foods, were underpaid a total of $20,230 across two months and were issued false pay slips between December 2020 and February 2021.

The Federal Circuit and Family Court has hit KLM Foods with a $135,143 fine and also ordered a $44,078 penalty against Loveleen Gupta, the sole director of the company and a manager of Vizaan, a business which employed one of the affected workers at the Kingston outlet.

United Petroleum outlet in Sandy Bay. Picture: Supplied/Google

Vizaan has since gone into liquidation.

The four underpaid workers were visa holders from India and Bangladesh and were found to have been paid unlawfully low flat rates for the work they performed as console operators.

One was aged just 19-20 at the time of the underpayment and the individual underpayments ranged from $2597 to $9574.

The workers were paid flat rates ranging from $16 to $23 per hour for a fixed number of hours per week. They were not paid anything for extra hours worked.

According to the Fair Work Ombudsman, Anna Booth, this resulted in the four individuals being variously underpaid minimum wages, as well as overtime and penalty rates for weekends, public holidays, and afternoon shift work.

KLM Foods and Vizaan rectified the underpayment of the entitlements for the four workers after the Fair Work Ombudsman began investigating the matter.

But KLM Foods and Mr Gupta also breached the Fair Work Act by requiring one of the affected workers to make an unlawful cashback payment of $6353 to KLM Foods in June 2023. The additional underpayment resulting from this transaction has since been rectified.

The Fair Work Ombudsman said KLM Foods had knowingly issued false pay slips and provided the ombudsman with false timesheets.

Fair Work Ombudsman Anna Booth. Picture: NewsWire / Martin Ollman

Ms Booth said the underpayment of visa holders was treated very seriously.

“We condemn the underpayments of migrant workers in this case. We also have zero tolerance for unlawful cashback arrangements that attempt to hide underpayments,” she said.

“All employees in Australia have the same workplace rights, regardless of their visa status, and must be paid in line with Australia’s lawful minimum pay rates for all hours worked.”

Judge Karl Blake ruled that KLM Foods and Mr Gupta had “blatantly disregarded” the terms of employment awards and found the breach relating to a worker being required to unlawfully repay wages was “particularly unpalatable”.

He said neither KLM Foods nor Mr Gupta had shown any remorse for their conduct and there was therefore a need to impose penalties to deter them from committing future breaches.

Two of the affected workers gave evidence, saying the underpayments had a significant impact on their lives, an adverse effect on their wellbeing, and made it difficult to pay living expenses.

Originally published as KLM Foods, operator of two Tasmanian United Petroleum outlets, fined for underpaying workers