Stiff penalty for breach of sponsorship obligations

On 8 June 2016 a Darwin computer company was ordered to pay a penalty of $430,000 to the Commonwealth Government for breaches of its sponsorship obligations regarding three foreign sc457 visa holders. It was also ordered to pay more than $83,000 in restitution to the workers and the company’s sole director and shareholder Ashok Alexander was order to pay a personal penalty of $86,000.

The Federal Court found the company had underpaid its sponsored employees, illegally recovered costs from the employees by requiring them to repay some of their monthly salary and one employee was directed to work in a different occupation than the sponsored occupation. The court found that the breaches involved “calculated, systematic, repeated and callous infringements of the sponsorship conditions and the rights of the employees” and were “a cynical misuse and exploitation” of the company’s position.

The case shows that employers must be aware of, and comply with, their sc457 sponsorship obligations or face stiff financial penalties. If you are unsure of your obligations as an employer Supra Legal can provide you with advice in relation to these.