GPS cleaning company treated vulnerable employees as 'slaves': court

Her colleague Freddy Herrera, an engineering student from Colombia, worked for GPS for five hours a day, seven days a week and "was grossly underpaid throughout his employment", according to Federal Court judge Anna Katzmann.

Mariana de Queiroz, meanwhile, was "struggling with bills and paying rent" and said that GPS' failure to pay her a month's wages and accrued annual leave imposed "a big financial and emotional burden" on her and her family.

These are three of the 51 employees of the company, formerly operated by Rosario Pucci and now owned by his brother Enrico, who will be paid a total of $223,000 in back pay after the Federal Court found GPS treated vulnerable employees as "slaves".

"Understandably, GPS' conduct caused the employees considerable hardship," Justice Katzmann said. "Many had to borrow to meet household expenses. At least one went without food."

Justice Katzmann also issued penalties totalling $447,300 against GPS, a Sydney-based cleaning company that lists government, schools and universities, and gyms as clients, and the Pucci brothers.

"It is self???evident that GPS profited from its exploitation of these employees," she said.

For more than two years, GPS made a calculated attempt to avoid paying minimum award rates of pay and statutory entitlements to employees, "the vast majority of whom were vulnerable to exploitation of this kind", according to Justice Katzmann.

She said many of the employees owed money by GPS were foreigners on temporary visas, had limited English skills and "were unlikely to have been familiar with Australian labour laws".

"Many, if not all, were struggling financially," she said. "Several had been unemployed for some time before securing work with the company. Some were treated by GPS as slaves."

Justice Katzmann said GPS "deliberately" set out to avoid its obligations by setting up a labour hire company, National Contractors, to engage its workforce.

"I found that the evident purpose of this arrangement was to illegitimately advantage GPS," she said. "It was also a deceit practised upon the companies for whose work GPS had successfully tendered on the basis of representations that it did not sub???contract its work."

Justice Katzmann also said GPS underpaid its workers by attempting to disguise them as independent contractors: "Hapless employees were required to sign contracts falsely representing the nature of the employment relationship and obtain ABN numbers for non???existent businesses."

Justice Katzmann said GPS' response to its employees' complaints and the court action "could fairly be described as obfuscatory, if not obstructive".

Neither Enrico nor Rosario Pucci had exhibited contrition, and she said: "In all the circumstances, the risk that GPS will reoffend is exceedingly high."

The case against GPS was brought by the Fair Work Ombudsman, which obtained court orders in 2014 to freeze the assets of GPS to prevent it from being stripped of assets or placed into liquidation - actions that would frustrate any back-payment orders against the company.

In 2011, Rosario Pucci, was penalised $4400 for underpaying staff, but his company Wash and Go had gone into liquidation, preventing the Fair Work Ombudsman from securing penalties against it.

Fair Work Ombudsman Natalie James said: "This matter involved dubious 'labour hire' arrangements, corporate structures and sham contracting arrangements that were used by a second time offender in a calculated attempt to avoid responsibility for vulnerable workers' entitlements."

Ms James said considerable time and resources had been spent to recover GPS' employees legal entitlements and ensure the company was held liable for "completely unacceptable contraventions of workplace laws".

"Those rogue employers in Australia who think they can build businesses around the blatant exploitation of vulnerable workers need to get the message that we will pursue you to the full extent of the law, ensure you receive the punishment you deserve and destroy your unlawful business model," she said.