An Australian 'Shark Tank' startup fined $329,133 for exploiting young workers

Getty ImagesKath Purkis.

Failed startup Her Fashion Box has been fined for exploiting young workers, according to court documents.

The company, which secured $200,000 on the Shark Tank TV show, was fined a total of $329,133 by the Federal Circuit Court in Sydney for failing to pay three workers what they were owed.

Kath Purkis, the sole director of Her Fashion Box, has been told to personally pay $54,855 of the fine.

Her Fashion Box, which sold online subscription boxes with fashion accessories and make-up, failed to pay the workers $40,543 between 2013 and 2015. It neglected to pay minimum hourly rates, overtime, public holiday pay, and annual leave. The three workers have now been paid back in full.

One of the three workers, a graphic designer, was unlawfully used as an “unpaid intern” when she was technically a part-time employee. She was underpaid $6,913, the court found.

Another graphic designer, who struggled to afford basic living expenses, was underpaid $15,511 over a two year period where he worked full time, according to Sydney Morning Herald. He had to borrow money from his mother and could not afford lunch every day. A brand partnerships manager that worked full time was also underpaid a total of $18,119 over a 12 month period.

Her Fashion Box went out of business in 2017 and currently has unsecured debts of $200,000.

Her Fashion Box founder and CEO Kath Purkis. Source: Twitter/KathPurkis

Purkis told the court that she has currently no income or property, adding that her partner is supporting her financially.

“There is no doubt that the penalties are substantial,” Judge Nicholas Manousaridis said on Thursday, according to News.com.au. “Unfortunately, the conduct constitutes serious and sustained contraventions of important provisions of the Fair Work Act.”

He added: “The penalty should be set at a level that, having regard to the other circumstances of the case, should signal to employers who might be tempted not to inquire into their legal obligations as employers or not to comply with their legal obligations, particularly in relation to inexperienced workers, that there is a significant risk of being exposed to the imposition of a pecuniary penalty if they are to succumb to such temptation.”

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