Belconnen therapeutic massage parlour fined $1 million for threatening, underpaying seven staff

A therapeutic massage parlour at Belconnen that underpaid its workers and threatened to send them back to the Philippines or arrange to kill their families has been fined about $1 million.

The seven Filipino workers at Foot & Thai Therapeutic Massage were underpaid $971,092 and subjected to coercion, discrimination and adverse action, the Fair Work Ombudsman said.

On Friday (10 May), the Federal Court ordered the massage parlour, as well as its director, Colin Kenneth Elvin, and his second-in-command, Jun Millard Puerto, to pay fines totalling $966,890.

Fair Work Ombudsman Anna Booth said these penalties were the third-highest in the national regulator’s history.

“This matter is one of the most shocking cases of exploitation the Fair Work Ombudsman has ever encountered and deserves the strongest possible condemnation,” she said.

“The deliberate and calculated exploitation of vulnerable migrant workers has absolutely no place in Australian society.

“These substantial penalties send a clear message that those who deliberately defy Australia’s workplace laws and shamefully exploit vulnerable migrant workers will face serious consequences.”

The massage parlour and Mr Elvin were also ordered to pay about $1 million in compensation for the money the workers had been underpaid, as well as the loss they suffered.

Between 2012 and 2016, the seven Filipinos worked as massage therapists on temporary visas. Mr Elvin hired them, set their wages and conditions, and managed the business.

In Friday’s judgement, Justice Anna Katzmann said it was apparent that all the workers had been threatened by Mr Elvin and remained “in fear of him” years later.

“Their distress was palpable,” she said.

She accepted the ombudsman’s submission that each of the workers suffered “significant emotional harm and distress as a result of living in fear of [Mr Elvin] becoming angry and sending them back to the Philippines or of killing their families back in the Philippines [which they endured] for a sustained period of approximately three to four years”.

“I had the strong impression from watching and hearing them in the witness box that their suffering was ongoing,” Justice Katzmann said.

She found the massage parlour had failed to pay the workers minimum hourly rates, public holiday penalty rates, Monday to Saturday overtime rates and Sunday overtime rates.

She also found it had required six workers to spend $800 per fortnight of their wages on its business when the business was struggling, and it had also deducted certain amounts from the workers’ wages as “staff loans”.

“It goes without saying that the contravening conduct in this case was extremely serious. As the ombudsman submitted, it involved the systematic exploitation of two groups of migrant workers over a period of four years,” she said.

She also said the evidence was that the massage parlour recruited only Filipino massage therapists as Mr Elvin believed they would put up with below-award rates and conditions because he knew they were paid even less in the Philippines. He also thought they were unlikely to complain as their families depended on their financial support.

“The overwhelming majority of the contravening conduct was deliberate and intentional, rather than inadvertent or careless,” Justice Katzmann said.

“The massage therapists were enticed to come to Australia to work for [the massage parlour] on false promises.”

She did say Mr Elvin reported he was unemployed and has “no money”, while Foot & Thai remains in liquidation.