A Melbourne fertility clinic operator has been fined almost $70,000 for withholding thousands of dollars in parental leave entitlements from an employee.
Sarah* was working as a Chinese medicine practitioner at the Pagoda Tree Clinic in Albert Park, when she took parental leave to have her first child in 2018.
She was owed $12,948 in government-funded parental leave payments, but was paid less than half of that.
Clinic operator, the Pagoda Tree (Vic) Pty Ltd, and sole-director Natalie Jade Kringoudis, were taken to court by the Fair Work Ombudsman, after complaints to the Department of Human Services.
The Federal Circuit and Family Court found the Pagoda Tree withheld more than $7,000 in parental leave payments, as well as more than $10,000 in annual leave entitlements.
Sarah said she was surprised to learn that the payments had been intentionally witheld.
"I never expected anything like this to happen. It was very hard financially, it was very hard emotionally," she said.
Ms Kringoudis was personally fined $10,962, while the company was fined $58,590 for contraventions of the Fair Work Act.
Parental pay used for travel and personal living expenses
The court found the Pagoda Tree had received the parental leave funds from the federal Department of Human Services, but failed to pay Sarah.
The outstanding payments were instead transferred to the personal bank accounts of Ms Kringoudis, and used to pay for living expenses, including restaurant meals, alcohol and travel.
The court found the underpayments had left the employee in considerable financial hardship, and that she had made repeated requests for her entitlements.
In one email in April 2019, Sarah told Ms Kringoudis her savings were "nearly gone" and she found herself in a "very bad" financial situation.
It was only after the Fair Work Ombudsman investigated the matter that the outstanding payments were rectified.
Judge Alister McNab found that Ms Kringoudis had been "fobbing off [Sarah] over an extended period of time".
The failure to transfer the funds amounted to "an employer improperly appropriating Commonwealth funds", he said.
"The fact that the Respondents have received funds which have been provided to them for the purposes of remitting to an employee to assist through maternity leave and then used those funds for their own purpose must be deplored."
New mother struggled waiting for payments
When she first started working at the fertility clinic, Sarah said she had felt valued and respected, and considered Ms Kringoudis – a self-proclaimed "fertility expert" – a friend and mentor.
As a migrant with no family in Australia and limited support, her colleagues and Ms Kringoudis became her "family away from home".
And when the payments were first failing to come through, Sarah gave the company the benefit of the doubt.
Sarah said Ms Kringoudis would tell her she was struggling financially, but that didn't match what she saw on her social media.
"She wasn't hurting for money to do what she wanted to do.”
The Pagoda Tree promotes itself as a boutique natural fertility clinic, offering fertility and pregnancy treatments using traditional Chinese medicine.
Sarah said the company's stated aims and values around supporting women feel very hollow after the way she was treated.
"There's no way to explain it," she said.
"It's such a contradiction, the image being put out externally and what's actually done."
Parental leave payments for the 'direct benefit of new parents, not employers'
It's the second time the Fair Work Ombudsman has taken action against an employer for failing to pay paid parental leave entitlements to an employee.
In 2018, New South Wales man Kulpreet Singh and his company were fined more than $118,000 after falsely claiming he paid parental leave to an employee's husband.
Ombudsman Sandra Parker said the penalties sent a strong message that the unlawful misuse of government payments was a serious matter.
"We will act to ensure they are passed on in full as the law requires."
Ms Kringoudis has been contacted for comment.
*Surname withheld for privacy
