In an Australian first, the Fair Work Ombudsman won a landmark case in the Federal Circuit Court, where it was found that an employer had been underpaying two of his employees on the basis of racial discrimination. (See Fair Work Ombudsman v Yenida Pty Ltd & Anor [2018] FCCA 1342.)

The employer was fined $211,104 under racial discrimination provisions of the Fair Work Act 2009 in a judgement that could now open the door for many other similar prosecutions.

Warning to employers about unlawful workplace discrimination

This ruling cautions all employers about the serious consequences of discriminating against their workers.

It is illegal under section 351 of the Fair Work Act to discriminate against any of your workers on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Ethnic background cannot be used as grounds for treating employees adversely

This case involved the owner of a Tasmanian hotel who had employed a Malaysian couple to work within the business. The working conditions for the Malaysian couple differed from those of the hotel's other employees, in that they were paid less and had to work longer hours.

The hotel owner, who was of Chinese extraction, unsuccessfully argued in court that he regarded the couple, who were also of Chinese racial extraction, as "family" and that in Chinese culture it's normal for family members to work hard and help each other out.

Recruited in Malaysia, the couple entered Australia on 457 skilled worker visas to work in the hotel's restaurant. The court was told the husband had to work 57 hours a week over six days for four years and was allegedly underpaid by $20,550. His wife was employed as a kitchenhand, working up to 51 hours a week and was underpaid by $8,775.

The court found that the manager fully understood that all staff were legally entitled to the minimum award pay rates and conditions, but chose to pay the Malaysian couple significantly less than Australian staff because of their race.

Workers from overseas often subjected to unfair workplace practices in Australia

Similar scenarios of unlawful workplace discrimination take place across Australia every day, especially where there are employees who are working in Australia on 457 visas. I see far too many cases of workers being underpaid, especially foreigners on work visas and backpackers in particular.

These workers are vulnerable because they depend on their employment to stay in Australia and they are mostly unaware of their rights under Australian employment law.

By choosing to pursue this case, the Fair Work Ombudsman has set a strong precedent for preventing workplace discrimination, drawing attention to the penalties for employers if they do take adverse action against workers due to certain personal employee attributes.

Nathan Luke
Employment law
Stacks Law Firm

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