Plastics company paid husband and wife workers $8 an hour

Sydney plastics company underpaid husband and wife more than $76,000, paying them as little as $8 an hour to work 10 hour days.

A Sydney plastics company underpaid a husband and wife aged in their 50s more than $76,000, paying them as little as $8 an hour to work 10 hours a day to perform factory duties that included operating machinery and mixing chemicals.

But the factory owner tried to justify paying the two Sri Lankan visa holders well below the legal minimum, claiming he had engaged in “enterprise bargaining” and the couple agreed to work for below award wages.

Delahill Pty Ltd, trading as ABCO Plastics in Guildford, has been penalised $15,000 and one of its directors, Guilherme Roque Rebello, $3,000, for failing to meet a deadline to back-pay the workers.

Anura and Gnana Karunaratne were initially offered $50 each a day for 10 hours of work a day. When Mr Karunaratne said the amount was too low, Delahill paid them $6.50 an hour for a three month probationary period.

Mr Rebello’s wife, Sylvia, increased Mr Karunaratne’s pay rate to $13 an hour after three months. But she claimed company policy prevented it employing married couples so Mrs Karunaratne would not be on the payroll and would be paid $8 an hour.

For a year, Mr and Mrs Karunaratne also worked on Sundays in the garden of a property owned by the Rebellos. Each time, Mr Karunaratne worked for 10 hours and was paid $50, or $5 an hour.

For the factory work, which included mixing raw materials into machines, using machinery, mixing chemicals and loading boxes, the couple were entitled to hourly rates of more than $17 for ordinary hours and up to $32 for overtime.

In Federal Circuit Court evidence about the impact of the low wages, Mr Karunaratne said the couple visited a food bank once a week to get dinner, and used savings brought to Australia to pay for their daughter’s university fees.

After being paid $8 an hour for 12 months, Mrs Karunaratne asked for a pay rise, and her wage was increased to $13 an hour. A year later, she again sought a pay rise and the rate increased to $14 an hour. She was paid this rate for more than three years to September 2014.

Mr Karunaratne left the factory in June 2010 but Mrs Karunaratne stayed on as she believed she could not obtain other work because her English skills were “not perfect” and she did not have qualifications beyond high school.

The low pay rates led to Mrs Karunaratne being underpaid $76,498 between January 2010 and September 2014 and Mr Karunaratne being underpaid $10,197 between July 2009 and June 2010.

The court found Delahill breached workplace laws by failing to abide by a compliance notice issued by the Fair Work Ombudsman requiring the company to back-pay the couple $86,695 by April 30 2015. The back payments were finally made in December 2015.

During the ombudsman’s investigation, Mr Rebello accused the couple of taking advantage of he and his wife’s “good nature and naivety”, claiming they agreed to work below the legal minimum.

He said he understood he “unknowingly” broke the law, but he had given the couple a chance to get into the workforce and four years later they decided to “stab us in the back” by complaining to the ombudsman.

Federal Circuit Court Judge Robert Cameron said the amounts owed to the couple were significant and Delahill’s failure to abide by the compliance notice had a “significant effect” on them. “[The couple] deposed that they felt sad and stressed working for such low wages and struggled to meet their living expenses and buy food,” Judge Cameron said.

“Instead of accepting responsibility for the underpayment on behalf of Delahill, Mr Rebello instead blamed [the couple] for accepting the underpayments.”

The ombudsman took legal action over the failure to comply with the notice, not for breaches of the law for the underpayment of the two workers. Given this decision, the court said regard should only be given to the failure to comply with the notice, not the underlying conduct.

Fair Work Ombudsman Sandra Parker said the agency made extensive efforts to resolve the matter outside of court, but the lack of co-operation from the company led to legal action.

“We took court action after the company provided no reasonable excuse for its failure to make the back-payments,” Ms Parker said.

“Failing to comply with our notices undermines the integrity of the workplace relations system, and we will continue to take legal action to ensure that employees receive the back-pay they are entitled to,” Ms Parker said.