Thinking | 28 July 2016

Abusing the 457 visa program

A Darwin based computer service company was ordered by the Federal Court of Australia to pay a penalty of $430,000 for repeatedly breaching its 457 sponsorship obligations. The company which was involved in assembling, distributing and repairing computer products and mobile devices had repeatedly underpaid and verbally intimidated its workers.

The director of the business was found by the Court to be ‘personally and centrally’ involved in the breach. The Court also found that the sole director stood to benefit from any financial gains Hallmark would have had by engaging in unscrupulous employment practices.

Throughout the investigation, the Director repeatedly lied to Departmental investigators and knowingly supplied them with false tax and employment records. This was despite the Director being cautioned of the criminality of lying to investigators.

The abuse process involved workers being forced to repay a portion of their wages back to the company. They were forced to work overtime and not remunerated for their overtime hours. The Director also recovered the costs associated with sponsoring workers for a 457 visa.

The Director attempted to conceal his practices by deterring workers from making complaints to the Department of Immigration, verbally intimidated workers by threatening to fire them if reports were made against him and ensure cash repayments were not reflected in any records held by the company. The Director also told workers to lie to the Department during the investigation telling them that if he was found guilty, the company would cease to trade and ultimately they would be out of jobs.

In addition to the fine imposed on the company, the Court imposed a penalty of $86,000 on the Director. Australian businesses are reminded that Courts are able to extend the penalty provision to the directors and owners of the business. Employers also need to be mindful of the number of hours workers are approved to work for in Australia and monetary compensation should be made for overtime work.

Minister for Immigration and Border Protection v Hallmark Computer Pty Ltd [2016] FCA 678

Contact

Mark Dunphy

Mark Dunphy

Partner & SCG Main Contact

Mark is the SCG Main Contact, and his practice encompasses both litigious and non-litigious applications of employment and industrial...

Kristopher Kunasingam

Kristopher advises on all aspects of migration to Australia, with particular emphasis on employment-related migration. He has advised a...

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