The operators of a Japanese restaurant in Adelaide have been penalised $78,220.80 by the court for engaging in an “elaborate subterfuge” against the Fair Work Ombudsman, with the judge determining that the company deliberately obstructed FWO’s investigation into underpayments of two visa workers.
CNL Group Pty Ltd, which operates a restaurant trading as Gyoza Gyoza in the Adelaide CBD under a franchise agreement, was penalised $66,528 and its sole director Yu Bing Li fined a further $11,692.80.
The case stemmed from the Fair Work Ombudsman’s investigation of the underpayments which was brought to their attention by the affected workers. Fair Work Inspectors looked at the workers’ own records as well as photos of pay records taken by one of the waitresses.
CNL Group and Li were found to have paid the workers rates as low as $12 per hour from April to August, 2018, resuilting in underpayment of the workers’ minimum wage rates, weekend penalty rates and late-night loadings under the Restaurant Industry Award 2010. In total, the two workers were underpaid $10,517.43, which has been back-paid.
The restaurant operator was noted to have made and kept false payment records and false payslips which were never provided to the workers, Li provided false records and the false payslips to inspectors on CNL Group’s behalf, and CNL Group failed to issue the workers with payslips and Fair Work Information Statements.
Acting Fair Work Ombudsman Mark Scully said the matter should serve as a warning that employers will be held to account for exploiting vulnerable migrant workers.
“Employers need to be aware that improving compliance in the fast food, restaurant and café sector and protecting vulnerable workers are priorities for the Fair Work Ombudsman and we are prepared to take action in response to serious breaches,” Scully said. “The conduct in this matter was made even more serious by the employer’s attempts to mislead the FWO and obstruct an inspector carrying out his important duties.”
Judge Stewart Brown, in the Federal Circuit and Family Court, described the conduct of CNL and Li as “extremely serious”, finding that two vulnerable workers had been exploited and left “living hand to mouth” and struggling to pay their rent.
Noting that CNL Group had previously been formally cautioned by the Fair Work Ombudsman for underpaying workers and failing to issue payslips, Judge Brown found that the breaches were deliberate. He also noted that the conduct in the matter involved “calculated action designed to frustrate the application of the industrial safety net to vulnerable employees”.
Judge Brown said there was a need to provide a general deterrence message to the industry that “the community will not tolerate the exploitation of employees”.