Salon operator penalised $112k for “self-serving subterfuge”

“Through a process of artifice, two vulnerable individuals, from overseas, were erroneously characterised as contractors, which led to them each being paid a fraction of their proper entitlements and being excluded from industry protections.”

Operators of an Adelaide hairdressing salon have been penalised a total of $112,000 and ordered to back-pay two exploited Taiwanese hairdressers almost $40,000 denied their proper entitlements following legal action by the Fair Work Ombudsman.

The Federal Circuit Court has penalised Mr Wei Wang $12,000 and his family company Sonisolar Pty Ltd a further $100,000, describing the exploitation as a “self-serving piece of subterfuge.”

Wang operates the F10 Quick Cut franchise outlet at the Elizabeth Shopping Centre and formerly operated the outlet at Arndale Shopping Centre.

The two exploited Taiwanese hairdressers – a man and a woman in their 20s – were underpaid a total of $39,144 when they worked at the salons between September 2013 and May 2014.

They were in Australia on 417 working holiday visas and spoke limited English.

Judge Stewart Brown has ordered Wang and Sonisolar to back-pay the workers in full.

Judge Brown has ordered Wang and Sonisolar to pay $13,862 to the Fair Work Ombudsman towards the cost of flying the two underpaid workers from Taiwan to Adelaide to be witnesses for a contested hearing in May.

After the witnesses arrived in Adelaide, Wang did an about-face and admitted the contraventions on the morning of the scheduled hearing.

Judge Brown found there was “significant substance to the Fair Work Ombudsman’s submission that Wang’s actions were tactically motivated and he had no intention of defending the proceedings on their merits.”

The exploitation involved Wang recruiting the two workers from Taiwan and requiring them to work a 50-hour week over six days – but treating them as independent contractors, paying them amounts that resulted in an average rate of less than $10.50 an hour.

They were entitled to be provided with minimum employee entitlements under Australia’s Hair and Beauty Industry Award, including more than $17 an hour for ordinary hours and up to $38 an hour for weekend, overtime and public holiday work.

Wages in lieu of notice and annual leave entitlements were also underpaid.

After the workers made underpayment allegations, the Fair Work Ombudsman investigated the case.

Legal action commenced after Wang refused to co-operate and rectify the matter.

In his judgment, Judge Brown dismissed Wang’s claims that, as a Chinese immigrant, he did not understand his obligations.

Judge Brown described the misclassification of the workers as a “self-serving piece of subterfuge” that was “designed solely to ensure that Wang paid the bare minimum to the two workers.”

“He must have been aware that, to all intents and purposes, the two were Sonisolar’s employees, working in the company’s salons, as directed by the company’s proprietor,” Judge Brown said.

“I regard the conduct of the respondents as being extremely serious and requiring a heavy level of censure. Through a process of artifice, two vulnerable individuals, from overseas, were erroneously characterised as contractors, which led to them each being paid a fraction of their proper entitlements and being excluded from industry protections,” Judge Brown said.

Judge Brown also noted that the workers had been upset by a report on the television current affairs program Today Tonight, which featured their full names and photos in airing claims by Wang that they had stolen money.

Judge Brown noted the workers denied the claims. The South Australian Police elected not to pursue the matter.

“This remains a serious case of wage exploitation of temporary workers from overseas, who notwithstanding serious attacks on their honesty, were prepared to return to Australia to assist authorities prosecute the persons who had exploited them.”

Wang and Sonisolar also breached record-keeping and payslip laws and failed to fully comply with two Notices to Produce employment records issued by Fair Work inspectors.

Inside Small Business

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