Queensland business owner jailed for contempt over staff underpayment case Queensland business owner jailed for contempt over staff underpayment case

Queensland business owner jailed for contempt over staff underpayment case
04 Jun 2018

A Northern Queensland business owner has been jailed – although he is now released pending appeal – following the Fair Work Ombudsman’s first contempt of court action over a case of underpaying staff.

According to the Australian Payroll Association, the Federal Circuit Court sentenced Leigh Alan Jorgensen, the owner-operator of Trek North Tours, to a 12-month jail term. He was also fined AUS$84,956 (US$64,322) for contempt of court by contravening a freezing order that applied to company funds.

Jorgensen had sought an urgent stay of the orders in the Federal Court and lodged an appeal against his conviction and sentence. He has now been released from jail on conditions, pending the outcome of that appeal. A date has not yet been set for the hearing.

Freezing orders were imposed by the Federal Circuit Court in 2015, preventing any dispersion of Jorgensen’s and his company’s assets until penalty and back-payment orders were complied with. The penalties and orders were the result of legal action by the Fair Work Ombudsman for underpaying five back-packers operating under 417 working holiday visas  in 2013 and 2014.

At the time, Jorgensen was told to pay a fine of AUS$12,000 (US $9,085), while his company had to pay a further penalty of AUS$55,000 (US$41,641) as well as provide the backpackers with the back pay they were entitled to in full by 17 July, 2015.

But both Jorgensen and his company failed to pay, which led to the creation of the freezing orders. Jorgensen also indicated he was prepared to “bankrupt” his company to avoid payment. He had previously told Fair Work inspectors that the backpackers “would not get a cent” in back-pay.

After the freezing orders were imposed, Jorgensen paid his personal fine and the freezing order against him was lifted. But his company failed to either pay its penalty or the workers’ back-pay, resulting in the freezing order against it remaining in place.

Fair Work Ombudsman Natalie James said that the commencement of the proceedings demonstrated that her agency was prepared to use every tool at its disposal to ensure justice was served. "This includes taking unprecedented new actions available to us across the legal framework, such as this one," she said.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

A Northern Queensland business owner has been jailed – although he is now released pending appeal – following the Fair Work Ombudsman’s first contempt of court action over a case of underpaying staff.

According to the Australian Payroll Association, the Federal Circuit Court sentenced Leigh Alan Jorgensen, the owner-operator of Trek North Tours, to a 12-month jail term. He was also fined AUS$84,956 (US$64,322) for contempt of court by contravening a freezing order that applied to company funds.

Jorgensen had sought an urgent stay of the orders in the Federal Court and lodged an appeal against his conviction and sentence. He has now been released from jail on conditions, pending the outcome of that appeal. A date has not yet been set for the hearing.

Freezing orders were imposed by the Federal Circuit Court in 2015, preventing any dispersion of Jorgensen’s and his company’s assets until penalty and back-payment orders were complied with. The penalties and orders were the result of legal action by the Fair Work Ombudsman for underpaying five back-packers operating under 417 working holiday visas  in 2013 and 2014.

At the time, Jorgensen was told to pay a fine of AUS$12,000 (US $9,085), while his company had to pay a further penalty of AUS$55,000 (US$41,641) as well as provide the backpackers with the back pay they were entitled to in full by 17 July, 2015.

But both Jorgensen and his company failed to pay, which led to the creation of the freezing orders. Jorgensen also indicated he was prepared to “bankrupt” his company to avoid payment. He had previously told Fair Work inspectors that the backpackers “would not get a cent” in back-pay.

After the freezing orders were imposed, Jorgensen paid his personal fine and the freezing order against him was lifted. But his company failed to either pay its penalty or the workers’ back-pay, resulting in the freezing order against it remaining in place.

Fair Work Ombudsman Natalie James said that the commencement of the proceedings demonstrated that her agency was prepared to use every tool at its disposal to ensure justice was served. "This includes taking unprecedented new actions available to us across the legal framework, such as this one," she said.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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