Record penalty of $660,000 for fruit market operator who underpaid employee

Record penalties of more than $660,000 have been issued against the former owner of a Melbourne fruit market and his company which deliberately ignored warnings about required pay rates and did not pay a refugee worker any wages for weeks.

Abdulrahman Taleb, the former owner-operator of the Sunshine Fruit Market in Sunshine, has been penalised $16,020 and his company Mhoney Pty Ltd $644,000 in the Federal Circuit Court.

The total $660,020 in penalties is the largest ever achieved as a result of a Fair Work Ombudsman litigation.

The court found a worker, an Afghani refugee who spoke little English, was paid nothing for a number of weeks in early 2012 and was later paid a flat rate of $10 an hour to a maximum of $120 per day for moving and stacking fruit and vegetables at the market.

He should have been paid hourly rates of about $17 for normal hours, up to $35 on weekends and up to $43 on public holidays under the General Retail Industry Award 2010. The company also failed to pay overtime rates.

The company underpaid the worker a total of $25,588 for two periods of work, each of about two months, ending in April 2012 and January 2013 respectively.

In his judgment, Judge Philip Burchardt criticised the scale of the underpayments and said Mr Taleb, the "mind and will" of the company, had been "taking advantage" of the worker.

The underpayments were so significant that the total not paid to [the worker] was, in relative terms, enormous for such a short time. Furthermore, for some of the time [he] was simply not paid at all," Judge Burchardt said.

"I accept the submission of the [Ombudsman] that the way it worked out was that [the worker] was paid wages of between $3.49 and $9.29 per hour," Judge Burchardt said.

"This was an egregious underpayment. It gave the respondents an unfair advantage in the competitive retail industry."

The worker initially came to Australia as an asylum seeker and spent time in detention before being granted Australian residency and released in late 2010.

"[The worker] was a vulnerable employee in that he was a recent arrival to Australia and totally lacked fluency in English, and could reasonably be understood to be most unlikely to be aware of any entitlements at law," Judge Burchardt said.

The Fair Work Ombudsman said the record penalties should serve as a warning to employers that those who exploit workers face major financial consequences.

The previous record penalties of $532,910 were secured by the Fair Work Ombudsman in February against the former owner-operator of an Albury cafe and his company, Rubee Enterprises Pty Ltd. That matter involved exploitation of five workers, including two visa holders.

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