A recent Federal Court judgment found Foot & Thai Massage, its former director Colin Kenneth Elvin and its former supervisor Jun Millard Puerto breached numerous sections of the Fair Work Act in relation to seven massage therapists recruited from The Philippines under temporary work visas.

Elvin, who admitted to offering bogus employment contracts, had threatened to send the workers back and have their families killed if they broke any of the rules he imposed on them.

These included having friends and partners, speaking to anyone about their pay and conditions, leaving the house at night and complaining "about anything".

The court found the parlour, which was wound up in August 2019, did not pay workers their various entitled rates, including minimum hourly rates, in 2012-16.

They were forced to work long hours beyond the 38 per week and required to pay $800 per fortnight of their wages back over an eight-month "cashback period" with Elvin telling them "the shop [was] not doing well".

Other breaches included improper record keeping of overtime hours and annual leave and that they knew they had false or misleading records.

The court found that all of the above breaches meant the workers were discriminated against based on their race and nationality.

The latest judgment found Elvin to have been "knowingly concerned in all of the contraventions" except for two related to payslips.

Puerto was also found to have known most of the breaches.

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In her remarks, Justice Anna Katzmann said Elvin was not "an honest man".

"The evidence is replete with examples of his dishonest business practices," Justice Katzmann said.

"Mr Elvin was generally prepared to say anything to exculpate himself, regardless of whether it was true or accurate."

She said the threats amounted to adverse action because, in effect, they were threats made to dismiss the workers.

"Having regard to the consistency of the evidence given by the massage therapists, their demeanour under cross-examination, Mr Elvin's propensity to lie when it suited him ... I am satisfied that the allegations that Mr Elvin threatened to send them back to the Philippines if they informed immigration of their working conditions and to have their families killed have been proved to the requisite standard," she said.

"Mr Elvin strenuously denied making any such threats but I do not believe his denials."

The judge said the therapists were genuinely afraid of Elvin after a number of them broke down during the hearing when recounting their experiences.

Elvin and Puerto filed defences based on the privilege against self-exposure to a penalty.

After the Fair Work Ombudsman's witnesses gave evidence in an October 2019 hearing, Elvin amended his and the parlour's defence, admitting to some of the allegations and neither denying or disputing others.

The most notable admission was unauthorised deductions from workers' wages labelled as "staff loans".

Puerto, who admitted to being Elvin's "second in charge", did not change his defence.

During their employment, the therapists lived together in a four-bedroom accommodation and were driven to and from work each day.

The only remaining issue to be determined is the exact underpaid figure to the workers.

The Ombudsman, which started the legal proceedings, calculated that they were underpaid $1.18m before certain deductions.

Ms Katzmann said she considered the assumptions underlying that figure to be fair and reasonable but has ordered for the parties to "use their best endeavours to agree on orders ... including the amount of the underpayments".

The court has ordered for the parties to reach an agreement about the underpayment figure.

If the parties cannot agree by December 16, an inquiry will be conducted.

In March 2019, two of the workers won almost $40,000 in compensation after the Fair Work Commission found they had been unfairly dismissed in 2015.

The Ombudsman, Natalie James, said at the time that "the matter involves some of the most shocking allegations of exploitation her agency had ever encountered."

The agency said seven workers "were deliberately targeted because of their vulnerability".

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