Melbourne restaurant dealt $100K blow after “egregious” underpayment of visa holder

21 February 2017

A Melbourne restaurant has been hit with a $100,000 penalty after it “grossly exploited” a visa holder from Taiwan through underpayments worth more than $30,000 in less than nine months.

The operators of the popular Taiwanese and Malaysian ‘hawker-style’ restaurant now trading as Kitchen Republik, in Box Hill have been ordered to pay $107,551 after admitting to underpaying the worker with flat hourly rates of $10 and $11.

The employee, who came to Australia on a 417 working holiday visa and spoke limited English, was short-changed $33,169 working as a kitchen hand across two periods from June to November, 2014 and again from March to July, 2015.

Fair Work Ombudsman Natalie James said the substantial penalty sent another clear message that courts were unimpressed by the exploitative underpayment of visa holders.

“This decision highlights that all employees in Australia, regardless of their visa status, must be paid correct wages,” Ms James said.

“We treat cases involving underpayment of overseas workers particularly seriously because we are conscious that they can be vulnerable due to a lack of awareness of their entitlements, language barriers and a reluctance to complain.”

Judge Heather Riley said “the underpayments of minimum wages were very significant and deliberate”.

“Paying $10 or $11 per hour is an egregious departure from the mandated minimum rates of pay,” Judge Riley said.

“[The employee] was a young and vulnerable worker, who the respondent grossly exploited. It is necessary for the court to signal its disapproval of such conduct in strong terms, both to the respondent and to the industry generally.”

The employee was aged 22 when she began with the restaurant, operated by Food Republic Australia Pty Ltd. 

Judge Riley said there would have been significantly higher penalties had the company not co−operated with the authorities, taken corrective action and shown a degree of contrition.

A director of the company gave affidavit evidence that the contraventions were “totally unacceptable”.

“I accept that he does feel apologetic and remorseful. However, there was no evidence of any apology to [the worker],” Judge Riley said.

The company has been ordered to commission a professional external audit of the company’s compliance with its employer obligations, report the results to the Fair Work Ombudsman and to provide written details of the steps the company will take to rectify any underpayments discovered.

The company admitted to contravening the Restaurant Industry Award 2010, which entitled the worker to have been paid $17.49 to $18.02 for ordinary hours and penalty rates ranging from $22.53 to $45.05 for weekend, public holiday and overtime work.

The worker completed more than 770 hours of overtime, an average of about 20 hours overtime per week.  

The company also admitted failing to provide payment in lieu of notice and untaken annual leave entitlements on the worker’s termination, and record-keeping and pay-slip contraventions. The worker was not given any pay slips during either of the employment periods.

The Fair Work Ombudsman investigated after the employee lodged a request for assistance. She has since returned to Taiwan.

The company rectified the underpayments in full last year.

Ms James said the case also served as a reminder to employers about the important legal obligation to keep records.

“It is completely unacceptable for an employer to not issue pay slips,” Ms James said.  

“We provide free advice and resources to assist employers to understand and comply with their record-keeping obligations.”

In the 2015-16 financial year, 38 of the Fair Work Ombudsman’s 50 litigations (76 per cent) involved a visa holder. Sixteen of those litigations involved a 417 visa holder.

In 2015-16, the Fair Work Ombudsman recovered just over $3 million for all visa-holders, with $1.37 million of this for 417 visa-holders.

The Fair Work Ombudsman’s three-year National Hospitality Industry Campaign, finalised last year, resulted in more than $1.2 million being recovered for underpaid employees at restaurants, cafés and catering companies throughout Australia.

Employers and employees seeking assistance can visit www.fairwork.gov.au or phone 13 13 94. An interpreter service is available by calling 13 14 50.

Information to assist people from culturally and linguistically diverse backgrounds has also been translated into 27 languages and is available on the website.

Fair Work Ombudsman’s Pay and Conditions Tool (PACT) can assist business owners to calculate pay rates applicable to their business and templates for pay slips and time-and-wages sheets are available for free download.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.

Media inquiries:

Matthew Raggatt, Senior Media Adviser
Mobile: 0466 470 507
matthew.raggatt@fwo.gov.au

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