Restaurant operator penalised for “morally moribund” exploitation of Indian couple

9 September 2016 

A former Victorian restaurant operator has been penalised more than $50,000 and criticised for his “morally moribund” and “calculated and deceitful” exploitation of an Indian couple who were paid no wages for more than a year’s work.

The penalty has been imposed against Farok Shaik after the husband-and-wife gave evidence that they endured the exploitation for so long because Shaik had threatened to have them deported if they quit.

The woman gave evidence that Shaik had threatened to kill her.

The penalty, imposed in the Federal Circuit Court, is the result of an investigation and legal action by the Fair Work Ombudsman.

Shaik owned and operated ‘Indian Tandoori’ restaurants at several locations in regional Victoria before his company was placed into liquidation in 2014.

The Court has penalised him $50,872.50 after he admitted he failed to pay the couple any wages for 14 months of full-time cooking, food preparation and customer service work at his restaurants in Yarrawonga, Beechworth and Bendigo.

Despite having promised to pay the couple a combined income of $1600 week, Shaik provided them only food and accommodation and short-changed them a total of $85,844 ($42,922 each) between August, 2012 and October, 2013.

Judge Joshua Wilson has ordered the penalty imposed on Shaik be paid to the couple to partially rectify the underpayment.

The workers had been reluctant to complain about the lack of payment earlier because they were reliant on Shaik’s support for the woman’s Regional Sponsored Migration Scheme Visa application, which they hoped would lead to permanent residency in Australia.

The wife gave evidence that Shaik had responded to her requests for payment by threatening to withdraw his support for her visa and take steps to have her and her husband deported if they quit.

In a sworn affidavit, the wife stated that when she questioned Shaik about the visa application and progress, Shaik “said words to her to the effect that if she asked about the visa he would kill her”.

The wife gave evidence that “she suffered a great deal of mental distress mainly on account of the fact that she was receiving no money for the work she performed and the bills that required payment were increasing”.

Despite working long hours at Shaik’s restaurants, the couple was forced to borrow amounts of up to $2000 from friends and family and take on extra work cleaning motels “simply to survive”.

Judge Wilson said Shaik “had been notified of their parlous financial condition yet he took no step to alleviate their circumstances.”

Shaik also delayed telling the couple about the Department of Immigration and Border Protection’s refusal of the wife’s application for permanent residency in a timely manner, affecting her ability to respond.

The Fair Work Ombudsman submitted that the conduct was aimed at keeping the couple working at the restaurant as long as possible.

The couple eventually complained to the Fair Work Ombudsman in March, 2014 after they had ceased working at Shaik’s restaurants and received advice the visa application had been declined.

In addition to the underpayment contraventions, Shaik breached record-keeping and pay-slip laws, including providing false records to a Fair Work inspector and falsely claiming he had made cash payments to the husband-and-wife.

Judge Wilson found that there was “a great deal of force in the Fair Work Ombudsman’s submission that (Shaik) exploited the vulnerability of (the couple) in a way that was morally moribund and legally improper”.

“I have carefully considered whether it is correct to characterise the respondent's conduct as ‘calculated and deceitful’ and as a ‘calculated and deceitful strategy’. On balance, in my opinion it is.

“In a sense the deceit lay in the respondent continuing to represent to (the couple) that he was advancing their visa application and their path to permanent residency when in truth he was not and instead was exploiting them,” Judge Wilson said.

“His conduct was calculated in the sense that it was deliberate and well thought out. His strategy was deceitful in the sense that he deceived (the couple) to continue working when he had not paid them and, self-evidently, had no intention of paying them.”

Judge Wilson said Shaik’s contraventions “reflected a conscientious disregard for employment laws in this country”.

“They were redolent of exploitation. They were antithetical to compliance with the obligations that are imposed upon an employer,” he said.

Judge Wilson also said that he was not satisfied that Shaik was at all remorseful or contrite, describing an apology he offered in Court as “hollow” and noting he not made any form of restitution.

“Not a cent was paid nor offered by (Shaik) so as to redress the contraventions in this Case,” Judge Wilson said. “The respondent did not express his apology towards them, even in his native language, let alone in the English language.”

Judge Wilson said the penalty imposed should deter Shaik from further contraventions, noting that it was likely he would remain involved in the restaurant industry through a company operated by his wife.

Judge Wilson also said the penalty should create general deterrence.“I accept without reservation that this case is a further, lamentable, illustration of a prevalent phenomenon in the hospitality industry where employers exploit vulnerable workers by underpayment of salary entitlements and in other ways,” he said.

Fair Work Ombudsman Natalie James says the Court’s decision once again sends a message to rogue employers that exploitation of overseas workers in Australia will not be tolerated.

“Minimum wage rates apply to everyone in Australia – including visa-holders – and they are not negotiable,” she said.

“Employers must also be aware that employees are entitled to be paid lawful minimum wages for work they perform and deductions from wages are lawful only when they are principally for the benefit of an employee and there is a written agreement in place.”

Ms James says she is focused on ensuring the Agency does more to ensure culturally and linguistically diverse business operators understand and comply with Australian workplace laws.

“I am increasingly concerned about the number of matters where visa-holders and vulnerable workers are being underpaid by culturally and linguistically diverse business owners,” she said.

“I understand there are cultural challenges and vastly different laws in other parts of the world, but it is incumbent on all businesses operating in Australia to understand and apply Australian laws. To that end, the Fair Work Ombudsman is here to help with free advice and resources in a range of languages.”

Ms James says the Fair Work Ombudsman is also committed to improving compliance rates in the hospitality sector.

The Agency’s National Hospitality Industry Campaign, finalised earlier this year, resulted in more than $2 million being recovered for underpaid employees.

“The Fair Work Ombudsman is striving to build a culture of compliance where businesses understand and comply with their lawful obligations,” Ms James says.

Employers who are concerned that they are not meeting their workplace obligations can visit www.fairwork.gov.au or phone the Fair Work Infoline on 13 13 94. An interpreter service is available by calling 13 14 50.

Small businesses calling the Infoline can opt to receive priority service.

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

The Agency also has fact sheets tailored to overseas workers and international students and YouTube videos in 14 languages to assist workers to understand their rights.

Ms James said the Agency recently launched an Anonymous Report function which enables members of the community to alert the Fair Work Ombudsman to potential workplace issues. Intelligence can be provided at www.fairwork.gov.au/tipoff.

“While many employers want to do the right thing, there are some who seek to gain a competitive advantage by exploiting vulnerable workers, such as visa-holders,” she said. 

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:

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

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