Court action for alleged cashback payments

19 May 2021

The Fair Work Ombudsman has commenced legal action against the former operators of a Sydney hairdressing salon for allegedly underpaying a South Korean worker through cashback payments.

Facing the Federal Circuit Court are Yeon Beauty Salon Pty Ltd, which operated the ‘Yeon Art Hair’ salon in Eastwood, and the company’s sole director and manager Mi Yeon Ha.

Fair Work Inspectors investigated after the worker lodged a request for assistance. The South Korean national was sponsored by Yeon Beauty Salon on a 457 skilled work visa to work as a hairdresser at the salon between 2015 and 2019.

It is alleged that Yeon Beauty Salon and Ms Ha breached the Fair Work Act 2009 by requiring the worker to repay more than $100,000 of her wages and entitlements in cashback payments.

It is alleged the company also underpaid the worker’s minimum wage rates, a tool allowance, leave entitlements, and entitlements for weekend, public holiday and overtime work under the Hair and Beauty Industry Award 2010 and the Fair Work Act.

The FWO alleges the cashback payments and other underpayments resulted in the worker being underpaid a total of $169,266.

It is also alleged that Yeon Beauty Salon failed to make and keep records, on occasion issued the worker with false and misleading payslips and regularly failed to issue any payslip at all.

Under the reverse onus provisions of the Protecting Vulnerable Workers amendments to the Fair Work Act, Yeon Beauty Salon will be required to disprove a number of the allegations if they contest the matter in court.

Fair Work Ombudsman Sandra Parker said matters that involve the alleged underpayment of visa holders are treated particularly seriously, as they may be vulnerable to exploitation in the workplace. 

“The Fair Work Ombudsman will use all powers available to us to hold business operators to account when we encounter serious allegations that involve vulnerable workers.“

“All workers have the same rights in Australia regardless of nationality or visa status and anyone with concerns about their pay or entitlements should contact the FWO for free assistance,” Ms Parker said.

The FWO is seeking court-imposed penalties against Yeon Beauty Salon and Ms Ha and court orders requiring them to pay the worker $169,266 in compensation and back-payments, plus interest.

The company faces maximum penalties of up to $63,000 per contravention and Ms Ha faces maximum penalties of up to $12,000 per contravention.

A directions hearing is listed in the Federal Circuit Court in Sydney on 4 June 2021.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. A free interpreter service is available on 13 14 50.

Follow 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:

Ryan Pedler, Assistant Director - Media
Mobile: 0411 430 902
ryan.pedler@fwo.gov.au

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