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De Costi hit with $60K penalty after underpaying workers $1.6M

February 27, 2023

A Federal Court Judge has slammed De Costi Seafoods and hit it with a near-maximum $60,000 fine on top of almost $1.6 million it was forced to pay back to 230 current and former employees.

The AWU took De Costi – a subsidiary of Tasmanian-based and now Canadian-owned Tassal Group – to court in 2020, accusing it of engaging in wage theft to the tune of millions of dollars at the company’s Lidcombe processing facility in western Sydney.

The union said that for years hundreds of De Costi workers had been denied overtime rates they were entitled to under the Seafood Processing Award, despite working antisocial hours such as 1am-5am start times.

Last March the Federal Court agreed with the AWU’s claim, originally lodged on behalf of employees Elisapeta Tuala and Suman Pokharel, low-paid workers denied their proper entitlements for years.

Elisapeta and Suman generally worked Monday to Friday starting between 3am and 4.30am and finishing between 11am and 12.30pm. The spread of ordinary hours for “day workers” was 6am to 6pm.

The company tried to claim that because the workers habitually started before 6am and did not ordinarily work the spread of hours, they were not day workers but “non-continuous shift workers” and not entitled to overtime.

The court disagreed, finding Elisapeta and Suman were best described as day workers subject to penalty rates for hours worked outside of ordinary hours, and they were ultimately back paid $9787 and $12,154, plus interest, respectively.

Then on April 22, the company said it would play by the umpire’s decision, by told its workers the court decision was an “alternate interpretation to the one we have been operating under”.

This week in a judgment critical of the company’s conduct, Federal Circuit Court Judge Brana Obradovic found De Costi had committed a “serious” contravention of the Fair Work Act.

And she slammed its “alternate interpretation” claim, saying Tassal clearly knew of the overtime issue back in 2015.

“While De Costi Seafoods has a clean record, it even now seeks to excuse and minimise its culpability,” she said.

“The court does not find that De Costi Seafoods has displayed any contrition. The apologies it offered … are no more than bare apologies.”

By October last year De Costi had finally back paid $1,589,694 to 159 current employees and 71 former employees for overtime worked before 6am.

But handing down a $60,000 penalty this week – the maximum in this case was $54,000-$66,000 – Judge Obradovic said “the court finds that the contravention was serious and warrants a penalty which reflects the seriousness of the conduct”.

She said the need for general deterrence was readily apparent. “The terms of the award provide for minimum standards, they protect vulnerable and low-paid workers.”

AWU NSW secretary Tony Callinan said that in the wake of the court’s ruling, Tassal should be cleaning out De Costi management over “their unscrupulous and unethical behaviour throughout this entire sorry saga”.

“These are managers who thought they’d found a tricky technicality that allowed them to withhold money that should have gone to low-paid seafood employees doing arduous and dirty work,” Mr Callinan said.

“Then they fight the union tooth and nail when they’re called out. And even after being court ordered them to pay compensation they still contrive nonsense reasons to wangle out of it and withhold what is owed.

“The men and women who are in line for compensation were working in the middle of the night gutting, cleaning, and preparing the seafood that made their employer rich. The very least they should be entitled to is a fair day’s pay as required by law.”

AWU National WHS Director Chris Donovan said De Costi management had deliberately exploited its vulnerable workforce.

“They took advantage of that in what was a blatant case of wage theft,” Mr Donovan said.

“Many of these workers speak English as a second language and were afraid to speak up due to their precarious visa situations.

“Without the AWU on their side the De Costi workers would have been forced to donate more than a million dollars of their hard-earned to their employer.”

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