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The Federal Circuit Court has imposed a $272,850 penalty against a media company to send it a “serious message” not to disguise employment relationships as unpaid internships.

Judge Tom Altobelli has handed down the penalty against Sydney-based AIMG BQ Pty Ltd following an investigation and legal action by the Fair Work Ombudsman.

The company is linked to the Ostar International Media Group and operates Chinese-language websites and publications for Australia’s Chinese community, including the Oriental BQ Weekly.

Judge Altobelli also penalised company director Zhao Qing Jiang $8160 over his failure to comply with a Notice to Produce documents for Fair Work inspectors.

Further, Judge Altobelli  imposed a three-year injunction restraining Jiang from contravening workplace laws.

AIMG BQ admitted in Court that it underpaid two event co-ordinators a total of $18,767 between October, 2013 and June, 2014.

The company required one of the employees – an international student from China, aged 24 at the time and who spoke limited English – to do an extended period of unpaid work.

AIMG BQ required the student to do an ‘internship’ of 180 hours of productive work over a period of four months, with duties ranging from administration and office cleaning to event organising and magazine editing – before it started paying her wages.

It was unlawful for the internship to be unpaid because the student was performing productive work that was not a formal part of her studies, a Master of Event Management degree at the University of Technology in Sydney.

After the internship period, AIMG BQ paid the student an unlawfully low flat rate of $50 a day, or just $6.56 an hour. In total, the student was underpaid $8387.

Judge Altobelli found that AIMG BQ had exploited the employee “in order to obtain a reduction in wage costs”.

He said there was a need to send a “serious message” to AIMG BQ and Jiang that “the Court will not countenance attempts to disguise employment relationships as unpaid internships and thus deny employees their required minimum entitlements”.

Judge Altobelli noted a need to deter other employers from similar conduct.

He referred to a report released by the Fair Work Ombudsman in 2013 into the issue of unpaid work which found that growing numbers of Australian employers are using unpaid work schemes as an alternative to hiring paid staff.

“Employers should be in no doubt that they have a positive obligation to ensure compliance with the obligations they owe to their employees under the law,” Judge Altobelli said.

Published 4 June 2017

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