Fined for lack of passion in massage parlour
Massage parlour workers who were wrongly fined for “a lack of passion”, “resisting hard work” and “speaking on the phone during a massage” have exposed major problems in the industry.
A recent court case revealed that fining the staff for petty “breaches” was not only illegal but also common practice across the massage industry.
CCIQ’s Employer Assistance team have examined a recent court case and discovered there was an unhappy ending for the business owner – in the form of a substantial fine for them.
The Fair Work Ombudsman took a Melbourne-based massage parlour to the Federal Circuit Court of Australia for underpayment and unlawful deduction of wages.
After an investigation from the Fair Work Ombudsman, it was found that two Chinese massage therapists at Lu’s Healthcare were underpaid by tens of thousands of dollars each.
Instead of being paid the minimum wage as per the applicable Health Professionals and Support Services Award, the workers were paid a percentage of each massage they performed.
Not only were these employees paid the incorrect base wage, they were also ‘fined’ for not performing to the standards of management. Lu’s Healthcare would unlawfully deduct certain amounts from the employee’s weekly pay in accordance with the company code of conduct.
Examples of possible ‘fines’ included $100 for being late to work or absent without notice, or up to $50 for “a lack of passion or good hospitality”-- plus the threat of termination for speaking on the phone during a massage.
Under a section titled “disturbance of the work environment” in the code of conduct, a $20 fine for “noise making and playing around” and sleeping or lying on massage tables was applied.
And, if an employee “resisted hard work”, they would be “put back into apprenticeship again”.
Finally, the code also stated that “employees with other problems will undergo serious punishment”.
As a result, one therapist was short-changed $33,000 and the other $21,000.
The underpayments were only back-paid to these employees after legal proceedings commenced, almost 18 months after they occurred.
When handing down his decision, Judge John O’Sullivan said: “Ordering penalties at a meaningful level allows the court to show that there are serious consequences for failing to comply with workplace laws. Failing to impose a substantial penalty will remove the incentive for this employer and other employers to change their practices.”
The Judge imposed penalties totalling $118,800 against the director of Lu’s Healthcare, $112,860 in fines, and $5,940 to cover the legal action of the Fair Work Ombudsman.
A representative for Fair Work Ombudsman Natalie James said that the office had received information that the business model adopted by Lu’s Healthcare was common practice across the massage industry.
Ms James believed the penalties in this case should serve as yet another reminder to employers who avoid their workplace obligations.
“Minimum wage rates apply to everyone – including visa-holders – and they are not negotiable,” she said.
In circumstances where you wish to offer an incentive or bonus scheme to your employees, it is important that this is in addition to the minimum rates of pay prescribed in the relevant modern award.
You are able to make deductions from your employee’s wages in circumstances where the law permits the deduction and the employee has provided you with their written consent.
Applying a ‘fine’ to an employee for not performing in accordance with your code of conduct is not permitted. Instead, you should consider disciplinary action or a performance improvement process.
If you are at all uncertain about whether your workplace practices and wage rates are compliant, a good place to start is the Fair Work Ombusdman website at www.fairwork.gov.au.
The CCIQ employer assistance team can also help you to understand the minimum requirements and how to conduct your business accordingly. Phone us on 1300 731 988 or email firstname.lastname@example.org
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