A Queensland agriculture company has been fined $21,000 for unlawfully docking pay from dozens of seasonal farm workers for breaches of its “alcohol and drugs policy”.
McCrystal Agricultural Services, which operates a labour hire business and sweet potato farm in the Bundaberg region, made deductions from 29 employees in early 2022, totalling $14,500.
The company is an “approved employer” under the Australian Government’s seasonal worker program, now the Pacific Australia Labour Mobility (PALM) scheme, which allows businesses to hire employees from nine Pacific Island countries and Timor-Leste.
Last year, the Fair Work Ombudsman (FWO) launched action against McCrystal Agricultural Services and sole director Russell McCrystal, alleging contraventions.
According to an agreed statement of facts, filed to the Federal Circuit Court, the company’s policy at the time stipulated that employees were not allowed to consume alcohol or drugs during work or in worksite accommodation.
On August 24, 2021, Mr McCrystal issued a notice to workers that said: “Effective today, we are bringing in [the] following disciplinary rules”.
“1st instance of disobeying the above Alcohol & Drug Policy will result in a $500 fine … 2nd instance of disobeying the above Alcohol & Drug Policy will result in your employment being terminated and you will be returned home,” the notice said.
Employees then received a letter stating “As per the Alcohol Policy, a $500 fine is payable. Please sign the attached deduction form to pay this fine,” and signed the letter.
However, under the Fair Work Act, the company was not entitled to make those alcohol and drug policy deductions, the statement of facts said.
McCrystal Agricultural Services and Mr McCrystal have admitted to the breach, with the funds since remitted.
No authority to enforce penalties
During a penalty hearing in Brisbane on Monday, Judge Salvatore Vasta said he accepted Mr McCrystal’s statement that the alcohol and drug policy was established following extensive meetings with the local police and business community, who were “deeply concerned about the out-of-hours behaviour of the workers”.
“The policy was introduced, according to Mr McCrystal, as a last resort to address significant ongoing issues, which included alcohol-related domestic violence, reckless property damage, community endangerment, ” Judge Vasta said.
Mr McCrystal has been fined $5,500, while the company faced a larger pentalty of $21,000. (ABC Wide Bay: Brad Marsellos)
Mr McCrystal admitted it was a measure that “should have been considered further,” but he claimed was “nonetheless adopted in good faith in response to safety concerns raised by community members and other residents,” Judge Vasta said.
“He said at that time he was getting no support from the government or from the home countries of these workers in trying to manage this problem,” Judge Vasta said.
“He said now that it has been investigated by himself and his lawyers through the auspices of the Fair Work Ombudsman, he has realised that there was no authority under the Fair Work Act to do what he did, and in making the deductions he contravened.
“He understands that all the bona fides in the world cannot excuse that contravention of this legislation.”
It came after lawyers for the FWO argued there was a “layer of vulnerability” given the workers were under the PALM scheme, with their visas tied to their employer.
Judge Vasta told the court the case was an example where a contravention occurred but was unlikely to occur in the future due to changes that had been made, including having a Queensland Police Service liaison officer.
He penalised the company $21,000 for the contravention, as well as a further $5,500 for Mr McCrystal individually.
The business also admitted to contraventions relating to deductions for overtime overpayment and health insurance premium excess between 2021 and 2022, with Judge Vasta imposing another $22,000 in pecuniary penalties.