Boss guilty of wage theft jailed

The owner of a Queensland tour company that underpaid its workers has been jailed by the Federal Court in a contempt of court case brought by the Fair Work Ombudsman (FWO). It was the first time a boss had been jailed as a result of action by the FWO.

Trek North Tours owner Leigh Jorgensen was sentenced to 12 months' prison and fined $84,956 on May 10 when the Federal Court found he breached freezing orders by transferring company funds into his family trust before back paying workers. He spent one night in jail before being released after he appealed and secured an urgent stay against his conviction.

In 2015, Jorgensen was fined $12,000 and his company $55,000 for underpaying workers a total of $30,000. The workers were paid flat rates between $10 and $16.37 an hour and in some cases nothing at all.

After Jorgensen told FWO investigators he would “bankrupt” the company to avoid the fine and insisted the workers would "not get a cent" in back pay, the FWO secured orders freezing the funds of Jorgensen and his company until he paid the amounts. He then transferred $41,035 from two frozen company accounts into his family trust, the action for which he was convicted.

The Australian Securities and Investment Commission also successfully took legal action against Jorgensen for breaching the Corporations Act by falsely or misleadingly claiming his company had no outstanding liabilities, including the unpaid penalties and back pay orders, when he filed to deregister the company.

Jorgensen's sentence comes after new workplace laws came into effect in September that mean employers who provide false wage records to the FWO can face criminal prosecution.

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