The operators of an Australian-themed retail outlet in Melbourne have been fined over $120,000 for underpaying three shop assistants more than $90,000 over five years.

Something Aussie Pty Ltd has been penalised $101,400 and its sole director, Kuan Kok Kan, a further $20,280 in the Federal Circuit Court in Melbourne following legal action by the Fair Work Ombudsman.

The watchdog said Something Aussie and Kan paid the employees flat rates as low as $16 and $17 an hour.

“There is clearly a need for general deterrence in this case in the sense that other employers do not adopt a flat hourly rate of pay in the retail industry,” said Judge Norah Hartnett in her judgement.

The contraventions resulted in underpayments of approximately $30,000 for each employee, resulting in a collective underpayment of $91,238.

The underpayments were fully rectified by the business in December 2015.

Judge Hartnett imposed penalties equal to 26 per cent of the maximum penalties available because of the significant sums that were underpaid and because of Kan’s previous history with the Fair Work Ombudsman.

“I do not find [Mr Kan’s] conduct deliberate.  It was reckless or careless,” Judge Hartnett said.

Ombudsman Natalie James said a decision was made to commence litigation because of the seriousness of the alleged contraventions and because the agency has previously provided education materials to Kan on his workplace obligations.

James said the fact that Something Aussie and Kan continued to underpay entitlements even after being put on notice in 2012 was “completely unacceptable”.

“The court’s decision in this matter sends a message that this sort of conduct will not be tolerated. Minimum wage rates apply to all employers in Australia and they are not negotiable,” she said.

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