Melbourne-based IT businessman, Pradeep Gaur and his companies Konsulteq and Konsulteq Upskilling and Training Services, have been forced to pay more than $200,000 in penalties and compensation after exploiting two Indian workers.
The Fair Work Ombudsman investigated Gaur and his companies, and the Federal Circuit Court penalised Gaur personally $35,000 for a series of breaches in workplace laws including sham contracting, underpayments and record keeping.
His two North Melbourne-based IT companies have also been penalised $160,000 as well as more than $16,000 in outstanding wages to one of the employees, plus $5144 for sacking her after she complained.
Judge Grant Riethmuller found that the two Indian workers, one on a spousal visa, had a limited understanding of Australian employment laws and their entitlements, and Gaur deliberately underpaid them.
The two workers paid Gaur up-front ‘training fees’ of more than $2000 with the understanding it would lead to employment with his companies, but the workers were not provided with accredited training and weren’t properly paid.
Fair Work found that Gaur misclassified one employee as a contractor and then paid her less than half of her lawful minimum entitlements covering a 15-month period from 2010 to 2011, leading to a total underpayment of $16,571.
He also breached the adverse action provisions of workplace laws by terminating her employment after she continued to complain about her pay.
The other worker, who was also misclassified, was paid nothing for several days of work she performed when Gaur deemed she was volunteering “to get local work experience”.
He back-paid her for the work only after the Fair Work Ombudsman launched legal action.
Other record-keeping and pay slip laws were also breached. This isn’t Gaur’s first incident with the Fair Work Ombudsman. He was put on notice in 2011 after Fair Work conducted an audit and required him to back-pay eight employees he had underpaid more than $8000.
Judge Riethmuller said the two Konsulteq companies were nothing more than Gaur’s “alter egos” and he had attempted to use them “as a shield for his own conduct”.
He described Gaur as a “most unimpressive witness”, saying he was not able to rely on anything he stated.
Judge Riethmuller said Gaur had stated he was ready to rectify underpayments but never did and his company’s books were not consistent with his evidence that he could not afford to pay debts.
“Worse still, he attempted to deregister the companies during the proceedings (stating there were no proceedings pending); hoping this would resolve his problems,” Judge Riethmuller said.
“The attempt to deregister the companies exhibits a desire to avoid having to take corrective action. The conduct of the respondents show there is no remorse or contrition in this case.”
Judge Riethmuller said there was a need to deter Gaur and other employers from “attempting to use the corporate veil to avoid responsibility for workplace obligations where they have been the operating mind of the companies when conducting the breach”.
Fair Work Ombudsman Natalie James says deliberate exploitation of vulnerable overseas workers is extremely serious conduct that will not be tolerated.
“The penalties should serve as a warning to the minority of Australian employers who seek to exploit overseas workers that serious consequences apply if they are caught,” James said.
“Minimum wage rates apply to all employees in Australia – including visa-holders – and they are not negotiable.”