A court will hear allegations next week that foreigners were paid less than $3 an hour to work on oil rigs off the West Australian coast when they should have been covered by domestic employment laws.
The trial follows a battle by two foreign companies to keep the matter out of court by claiming neither they nor their Filipino employees should be subject to Australian laws.
The Fair Work Ombudsman took action in 2011 alleging four men were underpaid a combined $127,425 over nearly two years while working on two North West Shelf oil rigs operated by Woodside Energy.
It has since emerged the oil rig's manager, Maersk Drilling, was paying Perth recruiter SurveySpec $400 a day for each painter, but the workers received less than 10 per cent of that.
Justice Michael Barker dismissed applications by Hong Kong-based Pocomwell and Philippines-based Supply Oilfield Services to have the matter stayed.
The parties argued an Australian court was a "clearly an inappropriate forum" to hear matters about their obligations to Filipino painters working in an exclusive economic zone.
"It is inappropriate, vexatious, oppressive and an abuse of process to impose the terms of Australian industrial instruments upon foreign corporations and upon foreign seafarers subject to a different work environment, different labour conditions and a different legislative disciplinary regime", they stated.
And further, that Australia's Fair Work act does not apply to fixed platforms and "Australian majority crewed ships", and that Pocomwell and SOS were only obliged to follow Philippine employment laws.
However, Justice Barker found Australia's Federal Court was an appropriate forum because the ombudsman wanted to apply the Fair Work Act and "there is no prospect that any alternative foreign forum would be available to determine the rights and duties of workers" under that act. And that the act unambiguously covers fixed platforms within the exclusive economic zone. The matter has been listed for trial on April 8.
The Fair Work Ombudsman has also taken action against SurveySpec and its sole director, Thomas Civiello.
During the application to stay proceedings the court heard that Maersk Drilling Australia paid SurveySpec $400 a day for each employee. SurveySpec hired the employees from SOS for $US92 a day. And SOS hired the men from Pocomwell, which was paying them about $US30 a day. The men were paid $US900 a month for 84 hours of work a week.
"The third respondent [SurveySpec] was aware that the employees were being paid less than $92 per day ... [and] encouraged the second respondent to provide their lowest possible price for the hire of the employees," Justice Barker found.
The ombudsman alleges the three companies and Mr Civiello were involved in 11 breaches. Companies face maximum penalties of $33,000 per breach, while individuals face maximum penalties of $6600 per breach.
The employees worked on contracts of between 28 and 35 days to work on the Nan Hai VI rig, owned by China National Offshore Oil corporation and managed by Maersk Drilling. The painters entered Australia on 456 visas, which are issued to people for business visits of up to three months to attend conferences, meetings or negotiations.