Hotel penalised in FWO’s first racial discrimination case

modern hotel kitchen and busy chefs.

The Fair Work Ombudsman’s first racial discrimination litigation has resulted in penalties of $211,104 against the former operators of a Tasmanian hotel after they deliberately exploited two Malaysian employees of Chinese descent.

Chang Yen Chang – who owned and operated the Scamander Beach Resort Hotel on Tasmania’s east coast until 2014 – has been penalised $35,099 in the Federal Circuit Court. In addition, his company Yenida Pty Ltd has been penalised a further $176,005.

During the litigation, the Fair Work Ombudsman successfully proved in Court that Chang and his company breached the racial discrimination provisions of the Fair Work Act by treating the two Malaysian employees, who are husband-and-wife, differently to Australian staff by underpaying them a total of more than $28,000, requiring them to work extra hours and failing to record their hours of work.

Fair Work Ombudsman Natalie James said, “This employer knew that all staff were lawfully entitled to minimum Award pay rates but chose to pay the Malaysian couple significantly less than Australian staff because of their race, which is unlawful and completely unacceptable.”

Ms James added, “The Court’s ruling in this matter sends a message that singling out migrant workers for exploitation is serious unlawful conduct and significant penalties apply. All workers in Australia are entitled to our minimum wages, irrespective of their background, language skills or visa status.”

Chang claimed this was not the case but Judge Barbara Baker said she did not accept Chang’s denials. Baker found that Chang and his company “made a deliberate decision to treat (the Malaysian couple) differently to other employees”. Baker found that Chang “decided to recruit employees from Malaysia, in part because he knew a Malaysian would accept working six days a week and he knew that it was usual in Malaysia to work six or seven days”.

The Malaysian husband was recruited through an advertisement in a Malaysian newspaper in 2007 and Chang’s company sponsored him on a 457 skilled worker visa to work as head chef in the hotel’s restaurant until 2014. The husband was required to work six days per week, working a total of between 33 and 57 hours over the course of a week, often starting work when the restaurant opened for lunch and finishing after it closed for dinner. He was paid an annual salary of $45,240 to $46,280, which was not sufficient to cover the penalty rates he was entitled to for weekend, public holiday, evening and overtime work – resulting in a total underpayment of $20,550.

The man’s wife was on a spousal visa connected to her husband’s visa and was employed as a kitchen-hand in the restaurant between September 2009 and January 2010. She was required to work between 35 and 51 hours per week and was paid a flat rate of between $446 and $594 per week – only about half of what she was entitled to – leading to an underpayment of $8775 over a period of just four months.

Judge Baker found that Chang calculated the wife’s salary based on an award rate for 24 hours work per week, even though he knew the wife worked significantly more hours. The Malaysian couple and all Australian employees have been back-paid in full.

The Malaysian couple told the Fair Work Ombudsman they had been reluctant to complain about the way they were treated because they were worried it would affect their visas and applications for permanent residency. After the couple became permanent Australian residents in 2013 and the husband ceased working for Chang’s company in 2014, they lodged requests for assistance with the Fair Work Ombudsman and an investigation was commenced.

Judge Baker said the penalties imposed should deter hospitality industry employers from underpayment and record-keeping contraventions.