Remedying wage theft

13 Dec 2023

The underpayment of migrant workers in Australia is endemic.  According to recent research by the Grattan Institute, migrants workers are 40 per cent more likely to be underpaid than long-term residents, with as many as 16 per cent currently paid less than the minimum wage.  Here are 2 anonymised examples from 2023.

Mei is a Chinese national, in Australia on a working visa. At the time of her recruitment, she had very little knowledge of lawful working practices in Australia. Mei was recruited as a sales agent and was required collect donations for various charities on street corners and in shopping centres.

During her recruitment, Mei was given some paperwork to sign and was told she was an independent contractor. But Mei was also told she could not choose when she worked, she was required to wear a uniform, and she must work regular full-time hours. Mei was also never asked to provide an ABN. Over a period of approximately 6 months, Mei worked 58-hour weeks and received a total of just over $8,500.

We helped Mei demand her underpayments and alleged that despite any representations her employer had made, Mei was in fact an employee, and that any misrepresentation was in breach of the sham contracting provisions of the Fair Work Act. Her employer ultimately agreed to pay Mei her unpaid wages and superannuation early this year.

Following a class action in the Federal Court involving similar claims, Mei's employer appears to have changed its employment structure, which hopefully means no future workers will be trapped in similar sham arrangements.

Last year we told you about Zhi, a Chinese refugee who arrived in Australia in April 2017. Zhi does not speak English and worked in short-term casual roles where he was systemically underpaid.

When we first met Zhi, he was employed as a butcher and had suffered a workplace injury due to faulty equipment. When his first worker's compensation payment was significantly lower than his weekly wage, the employer explained that they had under-reported his wage so as to keep workers compensation premiums down. When Zhi asked this to be fixed, he was fired. We helped Zhi lodge a general protections application at the Fair Work Commission and represented him at conciliation. Zhi settled his claim favourably, including general damages and his former employer agreeing to report his correct rate of pay to the insurance company (resulting in an additional $157,500 in workers compensation payments).

We continued to assist Zhi this year and have now secured over $80,000 of unpaid wages, entitlements and superannuation from 6 of his former employers, including one where we obtained default judgment and wound up the employer and another where negotiated a settlement after successfully deferring their application for voluntary deregistration.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.