Court imposes penalties on employer who failed to back pay vulnerable young apprentice

Australian Building and Construction Commission

The Federal Circuit and Family Court has penalised an employer who failed to comply with two statutory notices issued during an ABCC investigation into the underpayment of a Victorian apprentice.

The Court sanctioned employer Jake Gray, who trades as Jake Gray’s Carpentry after he failed to cooperate with an ABCC investigation following a complaint made to the agency by the vulnerable first-year apprentice.

In applying near maximum penalties for two contraventions of the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) Judge Riley said Mr Gray had demonstrated “no contrition”, undertaken “no corrective action” and shown “disdain for the process”.

Judge Riley also highlighted the vulnerable nature of the then 18-year-old apprentice.

An ABCC investigation into a complaint lodged by the apprentice found he had been underpaid at least $11,392 in wages, overtime, annual leave entitlements and allowances.

In June 2020, the ABCC issued Jake Gray with a Notice to Produce documents relating to the apprentice’s employment. There was no response or compliance with the Notice.

On 19 November 2020, the ABCC issued a Compliance Notice under the BCIIP Act requiring Jake Gray to back pay the apprentice.

There was no response or compliance with this Notice, resulting in the ABCC taking legal action.

In commenting on Jake Gray’s actions Judge Riley said:

In relation to the question of whether Mr Gray’s contraventions were deliberate, I can only conclude, on the evidence available to me, that they were. This is a very significant aspect of the nature of the contraventions.

I also note that, at the time [the apprentice] began working for Mr Gray, he was only 18 years old,… . As such, [the apprentice] was a vulnerable employee. This is a very significant aspect of the circumstances of the contraventions.

Judge Riley went on to say:

Mr Gray has not demonstrated any contrition. Indeed, his failure to engage with the proceedings is indicative of disdain for the law, the court, the Commissioner and [the apprentice].

Mr Gray has not undertaken any corrective action, even though the orders made on 19 August 2021 set out exactly what he needed to do.

Mr Gray has not co-operated with the authorities at all. He has not made any admissions, except by default. He has put the Commissioner to the expense and inconvenience of pursuing this matter.

In applying near maximum penalties for a contravention of the BCIIP Act, Judge Riley said:

“In my view, Mr Gray’s apparent disdain for the law, the court, the Commissioner and [the apprentice] warrants a substantial level of specific deterrence. There is also a need for general deterrence to dissuade others from copying Mr Gray’s behaviour.

I accept that this case is very bad. It is possible to imagine worse cases of underpayment. … However, this is not an underpayment case. It is a case about non-compliance with a notice to produce and a compliance notice. It is hard to imagine a worse case of that type.

In all the circumstances of this case, it seems to me that the appropriate penalty for each contravention is $4,000. That is for all the reasons discussed above, but particularly because Mr Gray:

(a) has exhibited no contrition, has taken no corrective action and has not cooperated with the authorities in this proceeding;

(b) has shown disdain for the process, warranting a very significant level of specific deterrence; and

(c) has said nothing to the court in mitigation or in relation to his financial circumstances.

Judge Riley also ordered that Jake Gray pay the Commissioner’s costs of the proceedings.

ABCC Commissioner Stephen McBurney said the building and construction industry regulator would not hesitate to assist any worker underpaid by their employer.

“Mr Gray was given every opportunity to work with the ABCC inspectors and to then back pay the young apprentice that he employed. He chose to ignore repeated requests and we were left with no alternative but to pursue the matter through the courts,” Mr McBurney said.

“The apprentice in this case was a vulnerable employee who was significantly underpaid.

“The ABCC has successfully recovered $1.8m this financial year for underpaid workers. Employers like Jake Gray who fail to remedy underpayments and ignore the regulator will face the full force of the law.

“My agency stands ready to assist any worker who believes they have been underpaid.”

Employers and employees can visit www.abcc.gov.au/pay or call the ABCC hotline on 1800 003 338 for free advice and assistance about their rights and obligations.

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