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A Case of Grave Workplace Exploitation: Lessons from the Foot & Thai Massage Pty Ltd Ruling

In a landmark ruling, Foot & Thai Massage Pty Ltd (FTM) and its director have been ordered to pay over $2 million in fines and compensation. This follows egregious breaches of the Fair Work Act, which included underpaying temporary visa workers, enforcing a "cashback" scheme, and making threats to kill workers' families if they reported the abuses.


The Case Overview

The ruling, handed down by Justice Anna Katzmann, highlighted severe violations of workplace laws. The 2021 judgment found that FTM had engaged in multiple breaches, including threatening to deport the massage therapists to the Philippines and have their families killed. These actions contravened protections under the Fair Work Act against adverse action and coercion, specifically sections 340, 351, and 343.

A Case of Grave Workplace Exploitation: Lessons from the Foot & Thai Massage Pty Ltd Ruling
A Case of Grave Workplace Exploitation: Lessons from the Foot & Thai Massage Pty Ltd Ruling

Exploitation Rooted in Vulnerability

The court accepted that FTM exploited the workers' race and national extraction, believing the Filipina therapists would endure substandard conditions due to their financial responsibilities back home. The company also failed to pay the minimum hourly rates, penalty, and overtime rates as required by the Health Award. Instead, it forced six workers to refund $800 per fortnight during tough business periods, labelling these unlawful deductions as "staff loans."


FTM's practices spanned over three to four years, during which the therapists were collectively short-changed nearly $850,000. The company lured them to Australia under false promises of fair work conditions, only to breach these terms systematically.


A Deliberate Deception

Justice Katzmann noted that FTM's director admitted to deceiving the Department of Immigration, with no genuine intent to comply with the employment conditions for sponsoring workers on subclass 457 visas. The judge condemned the director's economic decision to ignore the Health Award's requirements, which significantly harmed the therapists.


Significant Emotional and Financial Harm

The therapists suffered profound emotional distress due to the constant fear of retribution if they spoke out. This distress was exacerbated by their dependence on their jobs for their families' financial support back in the Philippines. The court's ruling acknowledged this ongoing suffering and ordered FTM and its director to pay substantial compensation.


The penalties included $1,166,000 plus interest to the Fair Work Ombudsman (FWO) to compensate the workers, $778,100 in fines against FTM, and $150,140 against the director. A second supervisor involved in the breaches was fined $38,700.


No Remorse, No Lessons Learned

Justice Katzmann underscored the severity and intentional nature of FTM's conduct. Neither the director nor the supervisor showed any remorse or willingness to change, necessitating strong penalties for both general and specific deterrence. The ruling allows the FWO to remit penalties to the workers if the compensation is not paid.


In a related matter, FTM was previously found to have unjustly dismissed a massage therapist and a handyman-cleaner, highlighting a pattern of wrongful termination within the company. These unjust terminations, including allegations such as burping on customers and selling allegedly stolen goods, illustrate the company's repeated misuse of its power over employees. FTM's actions constitute wrongful dismissals that violate fair work principles and undermine employees' rights.


Conclusion

This case serves as a critical reminder of the importance of protecting vulnerable workers from exploitation and ensuring that employers are held accountable for their actions. The substantial penalties imposed on FTM and its director reflect the seriousness of their misconduct and the ongoing need for vigilance in upholding fair work practices.


As employment and human rights advocates, it is our duty to support those who face such injustices and to push for stringent enforcement of workplace laws to prevent such abuses from recurring.

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