Workers underpaid by employers will have a better chance of getting money owed to them after a “ground breaking” court decision.
This is good news for casual workers in the accommodation and hospitality industry, where under paying wages has become a business strategy.
The Federal Circuit and Family Court of Australia has ruled that individuals, not just employers, can also now be named in small claims cases to recover unpaid wages and entitlements up to $20,000.
“Now, vulnerable workers can name the person who employed them as a third party in their small claim applications – and have a much higher success rate of recovering their entitlements,” said Gabrielle Marchetti, principal lawyer at employment rights centre JobWatch.
The decision overturns a 10-year legal precedent and was made as part of a JobWatch underpayment case, which remains before the court and has been listed for further hearings in July.
In that case, eight international students alleged they were unpaid or underpaid, with amounts ranging between $675 and $7,256 each, for work that included cleaning, housekeeping and other duties related to accommodation.
Ms Marchetti said it meant more people would actually receive unpaid wages after a court order.
“In our view, this will result in greater access to justice,” she said. “Too often, our clients in small claims matters have been hampered by having court orders made only against the employer and not against any accessories.”
“This has allowed company directors to avoid liability, in circumstances where they might deregister the company or shift assets from the company to another legal entity and thereby make it impossible for our clients to get the money that was ordered to be paid to them.”