Massage parlour owner prosecuted for death threats and wage theft of migrant workers

The promise of work turned into a nightmare for these migrant workers. The Fair Work Ombudsman (FWO) has secured close to $1 million in penalties in a civil case that involved systematic exploitation, coercion, discrimination, and death threats against migrant workers at a Belconnen-based massage parlour.

Here we unpack this case, the FWO’s investigation, the court-ordered penalties, and remind employers that visa holders have the same workplace rights as every other worker in Australia.

So, what happened?

A massage parlour in Canberra was ordered to pay $966,890 in penalties for the systematic exploitation and underpayment of seven Filipino workers with unpaid wages totalling $971,092. During their employment as massage therapists from June 2012 to February 2016, the employees:

• worked for 12-plus hour days, six days a week.
• weren’t paid overtime; and
• weren’t paid the required penalty rates under the Health Professionals and Support Services Award 2020.

And that’s not the worst of it. The FWO’s investigation uncovered that the owner of Foot & Thai, Canberra man Colin Kenneth Elvin (Mr Elvin), had subjected the workers to coercion, discrimination and adverse action, even going as far as to threaten the families of his staff, claiming he would arrange for them to be killed if they spoke out about his mistreatment and send them back to the Philippines.

Justice Anna Katzmann found that the seven mistreated workers, who spoke limited English, were purposely sought out in the Philippines and brought to Australia under false pretences to work for Foot & Thai Massage. The workers believed they would be making award rates and wouldn’t have to work more than 38 hours per week. Instead, when they arrived, they were subjected to death threats, forced to work 12-plus hour days, and lived in fear during their time while working for Mr Elvin.

The decision

In handing down her decision, Justice Katzmann, imposed severe financial penalties on the business, Foot & Thai Massage, former business owner, Mr Elvin, and former supervisor, Filipino man Jun Millard Puerto (Mr Puerto). These penalties include:

• $778,100 against the business, Foot & Thai Massage;
• $150,140 against former business owner, Mr Elvin;
• An order for Mr Elvin to pay back a total of $1.166 million in compensation including back pay and interest to the workers; and
• $38,650 against former supervisor Mr Puerto for his involvement in threats and numerous other breaches.

FWO Anna Booth welcomed the heavy penalties, which are the third highest in the national regulator’s history, she stated: “This matter is one of the most shocking cases of exploitation the Fair Work Ombudsman has ever encountered and deserves the strongest possible condemnation.”

The business is currently in liquidation, so the Court has decided that if the back pay and compensation aren’t paid, the penalties – including those against Mr Elvin and Mr Puerto – will be given to the workers, as they have received only a small portion of their owed entitlements dating back to 2016.

The lessons for businesses

This case is a stern reminder for businesses that individuals who intentionally underpay employees or subject them to threatening behaviour, coercion, discrimination, and adverse action will be heavily penalised. There’s no grey area concerning workplace compliance; employers must be aware of all current employment standards including recent.

If these breaches happened today, the penalties could reach over seven million dollars and individuals could be imprisoned for deliberate wage theft.

As you can see, intentionally underpaying your employees doesn’t just cost your business financially, it can severely damage your reputation, and soon under new laws, individuals can face jail time and huge penalties. While most business owners wouldn’t dream of intentionally committing wage theft, mistakes can and do happen – this is where we can help you. Citation HR can complete a thorough HR compliance audit of your business – and the best part – this service is included in our monthly, cost-effective subscription that’s designed to protect your business from costly risks. If you’d like to explore how Citation HR can protect your business, contact our team here.

Uncertain about workplace compliance? Talk to us

 For clients of Citation HR  if any of the information in this article has raised questions or concerns about workplace compliance or you have another workplace matter you need assistance with, please reach out via our 24/7 Advice line.

About our author

Zaynab Aly is a Senior Workplace Relations Consultant at Citation Group. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.