The Fair Work Ombudsman (FWO) announced it had initiated legal proceedings against Sergey Stanislavovich Navasardyan, the former operator of the now deregistered Griffon Alpha Group Pty Ltd, for alleged underpayment of over $900,000 to 44 security guards in Perth. This case highlights the importance of employers adhering to the Fair Work Act and meeting their obligations to workers, particularly in vulnerable sectors.
The Allegations
The FWO claims that Mr Navasardyan was involved in systematically underpaying security guards employed by Griffon Alpha Group between December 2019 and May 2022. The security guards, many of whom were visa holders from non-English speaking backgrounds, were allegedly paid flat hourly rates between $21 and $25, which failed to meet their entitlements under the Security Services Award 2010 and 2020.
Underpayment is a serious contravention of the Fair Work Act, and in this instance, it is alleged that the workers were denied vital entitlements such as:
- Casual loadings,
- Penalty rates for weekend and public holiday work,
- Overtime rates, and
- Shift allowances
The FWO’s investigation uncovered that more than half of the total underpayments occurred for work done on Sundays, when employees are entitled to rates between $49 and $51 per hour. The underpayment amounts varied, with individual workers allegedly owed anywhere between $33 and $78,787.
The case against Mr Navasardyan is particularly concerning as it involves serious contraventions under the Fair Work Act, attracting penalties that are ten times the normal maximum. This reflects the severity of the allegations, which the FWO claims were part of a deliberate, ongoing pattern of exploitation.
Why This Matters for Employers
Employers, particularly those in industries like security where workers may have limited bargaining power, must take proactive steps to ensure they meet their obligations under the Fair Work Act. It is not just about paying employees a flat rate but ensuring that all legal entitlements are met, such as penalty rates for overtime, weekend, and public holiday work, as well as casual loadings and shift allowances.
Employers who fail to do so risk facing substantial penalties, as Mr Navasardyan is now facing. For each alleged contravention, penalties of up to $133,200 can be imposed. The total financial risk for businesses engaged in underpayment practices is significant, as the FWO pursues such cases aggressively, especially when visa holders or vulnerable workers are involved.
Additionally, it is important for employers to understand that taking deliberate action to underpay workers, particularly those on visas, can have far-reaching consequences. Visa holders are particularly vulnerable due to language barriers and their reliance on employment for visa status, which is why the FWO places extra emphasis on ensuring their rights are upheld.
The Role of Visa Holders
In this case, many of the affected workers were visa holders from non-English speaking backgrounds, making them more susceptible to exploitation. Vulnerable workers often find it challenging to navigate complex workplace laws, which is why it is essential for employers to be proactive in ensuring they comply with all employment regulations, regardless of the employee's background or immigration status.
A Warning to Employers
This case serves as a stern warning to all employers, especially those in industries that rely on casual and contracted labour, such as security, hospitality, and retail. Non-compliance with the Security Services Award or any other industry-specific awards can lead to severe legal and financial consequences. Employers must ensure that:
- Employees are paid according to the correct award rates,
- All entitlements such as penalty rates, overtime, and casual loadings are met,
- Regular audits and checks are performed to ensure compliance with workplace laws.
NB Employment Law advises employers to take immediate steps to audit their payroll systems and ensure compliance with all relevant awards and workplace laws. It is always best to seek professional legal advice if there is any uncertainty regarding obligations, particularly in relation to casual workers and visa holders, to avoid potentially severe consequences.
How NB Employment Law Can Help
At NB Employment Law, we understand the complexities of workplace laws and the challenges employers face in ensuring compliance, especially when it comes to vulnerable workers. If you are concerned about your business’s compliance with employment laws, including proper pay rates and entitlements, we offer tailored legal advice and support to help mitigate risks and protect your business.
Contact us today to arrange a consultation and ensure your business remains compliant with all employment laws, avoiding costly mistakes and penalties. Let us guide you through the legal landscape and help you protect your employees and your business.
For further information on employment laws and how to avoid potential violations, visit NB Employment Law or reach out to our team for professional advice.