Record penalties of $532,000 in café cashback case

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Record penalties of $532,000 have been ordered in a cashback case involving the exploitation of five workers at a café in regional NSW. Two of the workers were Indian cooks who were coerced into paying back portions of their wages under threat of violence, dismissal and withdrawal of support for their visas if they refused.

Fares Ghazale, former owner-operator of the Canteen Cuisine café in Albury, has been penalised $88,810 and his company Rubee Enterprises Pty Ltd has been penalised a further $444,100, in the Federal Circuit Court.

The total $532,910 in penalties is the largest ever achieved as a result of an FWO legal action.

Fair Work Ombudsman Natalie James says the record penalties send a clear message that there are serious consequences for deliberately exploiting overseas workers in Australia.

“These record penalties are a big blow in the fight to stamp out deliberate exploitation of overseas workers in Australia,” James said.

The Federal Circuit Court found that Ghazale, who operated Canteen Cuisine café until it closed in 2014, was involved in multiple breaches of workplace laws in relation to the two Indian workers, including coercion, adverse action, underpayment of minimum lawful entitlements and providing false records. Three Australian employees were also underpaid their minimum entitlements.

The workers, aged in their late 20s, were employed as cooks. The employees faced having to leave Australia within 28 days if Ghazale withdrew support for their visas.

One of the workers had been sponsored by Ghazale’s company on a 457 skilled worker visa and he was in Australia with his Indian wife, who was dependent on his visa to stay in Australia.

The second worker was on a bridging visa while his application for a 457 visa was pending.

Ghazale promised the two workers annual salaries in excess of $50,000 for a 38 hour week when he recruited them.

The workers were generally paid flat rates of $1000 and $830, respectively, for working 60 hours per week, including nights and weekends, which was below the minimum wage and penalty rates they were entitled to under Australia’s Restaurant Industry Award 2010.

Soon after commencing employment, Ghazale told the workers they would be allowed to keep only a fraction of their wages each week – which would ultimately result in them being left with as little as $6 an hour.

Ghazale coerced the workers into going to a local ATM to withdraw cash and repaying him large amounts of their wage by threatening to withdraw his support for their visas if they refused.

The employee being sponsored on the approved 457 visa was required to repay Ghazale $11,050 over a period of several months in amounts ranging from $450 to $940 a week.

When the employee complained to Ghazale about the cash-back scam, Ghazale threatened to “contact Immigration” if the employee refused to hand over the cash.

In total, the two Indian and three Australian workers were underpaid $87,909.

The Federal Circuit Court has also ordered Ghazale and his company to back-pay the five workers in full. In the event that this order is not complied with due to insolvency, the Court has ordered that part of the penalties imposed be paid to the workers to rectify the underpayments.

In his judgment, Judge Tom Altobelli found that the treatment of the Indian employees was “grossly exploitative” and described the conduct as “highly aggravating and extremely serious” and “particularly saddening.”

Inside Small Business