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October 2020

Huge penalties ordered for exploiting an employee

Huge penalties ordered for exploiting an employee

The Case

Mathew v Shahin Enterprises Pty Ltd (2020)

Mr Mathew was a service station console operator for Shahin Enterprises Pty Ltd (Shahin) in South Australia. Mr Mathew commenced proceedings against Shahin in the South Australian Employment Court for failure to pay his employment entitlements.

The Verdict

The South Australian Employment Court found that Shahin had:

  • underpaid Mr Mathew for a 10-minute handover period before starting shifts;
  • deducted 30 minutes’ pay for every shift exceeding 6 hours for a meal break, despite the meal break having not been taken;
  • not paid penalty rates for overtime – the Court dismissed Shahin’s assertion that Mr Mathew had voluntarily worked the overtime at the base salary rate;
  • deliberately exploited Mr Mathew by having a culture of systematically extracting daily amounts of unpaid work from employees;
  • no contrition for its actions and had publicly claimed it had not underpaid any employee; and
  • failed to implement rectification strategies to reduce the risk of further breaches.

The Court awarded penalties in the amount of $64,800 to Mr Mathew, in addition to the underpayments.

The Lessons

This decision demonstrates the preparedness of courts to significantly penalise employers for deliberate breaches of the law, particularly where no contrition is shown. Given others (e.g. directors, owners and HR officers) can be held accessorily liable for such breaches, it is important that care is taken to ensure this does not occur.


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