The operators of an Australian-themed retail outlet in Melbourne have been penalised more than $120,000.
The penalty is the result of underpaying three shop assistants more than $90,000 over five years.
Something Aussie Pty Ltd, which includes apparel in its merchandise offer, was the subject of legal action by the Fair Work Ombudsman.
It has been penalised $101,400 and its sole director Kuan Kok Kan, a further $20,280 in the Federal Circuit Court in Melbourne.
Something Aussie and Kan paid the employees flat rates as low as $16 and $17 an hour.
They underpaid minimum hourly rates, weekend and public holiday penalty rates and casual loadings as prescribed by the General Retail Industry Award 2010.
In her judgment, Judge Norah Hartnett said the penalty should deter other employers in the retail industry from engaging workers at illegally low flat rates.
“There is clearly a need for general deterrence in this case in the sense that other employers do not adopt a flat hourly rate of pay in the retail industry.”
The business also failed to engage the employees for minimum shifts of three hours per day.
It failed to provide adequate meal breaks and failed to pay one of the employees her leave entitlements on termination of employment.
The contraventions resulted in underpayments of approximately $30,000 for each employee, resulting in a collective underpayment of $91,238.
The underpayments were fully rectified by the business in December 2015.
Fair Work Ombudsman Natalie James said litigation was pursued because of the seriousness of the alleged contraventions.
She said the agency had previously provided education materials to Kan on his workplace obligations.
Judge Hartnett imposed penalties equal to 26% of the maximum penalties available because of the significant sums that were underpaid and because of Kan’s previous history with the Fair Work Ombudsman.
Hartnett recognised that relevant information about workplace laws was readily available to Kan, should he have chosen to read it.
“I do not find [Mr Kan’s] conduct deliberate. It was reckless or careless,” Judge Hartnett said.
James said Something Aussie and Kan continued to underpay entitlements even after being put on notice in 2012.
“The Court’s decision in this matter sends a message that this sort of conduct will not be tolerated. Minimum wage rates apply to all employers in Australia and they are not negotiable,” James said.