FWO to investigate Qld business for alleged pay deductions over alcohol policy breach

A Queensland-based labour-hire business and sweet potato farm will face legal action brought by the Fair Work Ombudsman after it allegedly unlawfully deducted money from migrant employees for breaching its alcohol policy.

McCrystal Agricultural Services operates a farm west of Bundaberg at South Kolan, run by director Russell McCrystal.

The FWO has claimed the company put in place a stringent protocol to fine employees $500 for breaches of the company’s alcohol policy, which stated that there was zero tolerance for workers being under the influence of alcohol while staying at the worksite accommodation.

According to the FWO’s investigation, between January and March 2022, 29 employees faced fines under the alcohol policy, totalling $14,500. Most of these impacted migrant employees who were residing in the accommodation on the farm.

There are further allegations that the company also deducted $2.50 more per week than the cost of the health insurance premiums obtained for the employees (a visa requirement), which resulted in deductions of $47.50 each for 27 of the company’s full-time employees, totalling $1,282.50.

The company is an approved employer under the Pacific Australia Labour Mobility (PALM) scheme, which consolidated the Seasonal Worker Program (SWP) and Pacific Labour Scheme (PLS), thus allowing it to have migrant workers on working visas.

Furthermore, after allegedly making a payroll error by overpaying 28 casuals for overtime in August 2021, FWO said it subsequently deducted – without the employees’ approval – $2,548.60 from their wages to recover the overpayments in the following pay period.

In total, the FWO alleged the company unlawfully deducted $18,331 from 66 employees who were covered by the Horticulture Award 2020. As part of the deductions related to overpayments, the FWO alleged that the total underpayments were $15,782 to 39 employees.

The ombudsman further alleges that employees were left with only around $150 net pay in a particular week following the various deductions, including the allegedly unlawful alcohol policy deductions.

Fair Work Ombudsman Anna Booth said the litigation highlighted the importance the workplace regulator places on the rights of visa holders.

“Acting to protect visa holder workers and ensuring compliance across the agriculture sector are priorities for the Fair Work Ombudsman. That focus includes ensuring any deductions from the wages of vulnerable PALM scheme workers are lawful and appropriate. We will hold employers to account.”

“Deductions are lawful in a limited range of situations, and employers must understand those laws. We have a range of information to help employers get it right.”

The migrant farm workers, who were from Vanuatu, did various tasks within their job role, such as cutting and sorting sweet potato vine into bundles; planting and packing sweet potatoes; weeding; general farm hand tasks; and constructing boxes for packaging.

“The visa holder workers allegedly underpaid in this case were only in Australia for a limited period and were highly reliant on their employer,” Booth said.

The ombudsman noted there was no tip-off for this employer. Instead, the FWO investigated it proactively due to its status as an approved employer under the PALM scheme.

The FWO has sought penalties of up to $66,600 from the company per contravention and the sole director, McCrystal, would face a penalty of up to $13,320.