Navigation

$196,000 penalty for Café owner-operators

A mother-and-son business team which deliberately exploited vulnerable overseas workers has been penalised almost $200,000 and ordered to back-pay former staff tens of thousands of dollars.

Café owner-operators A-Hsueh Lai and Chang Ming Liu short-changed five female staff from Taiwan, Hong Kong and Korea more than $54,000.

Paid as little as $10 an hour, the former visa-holders were underpaid amounts ranging from $8300 to more than $18,000 when they worked at the Japanese Sakuraya café in the Brisbane suburb of Eight Mile Plains between 2013 and 2014.

Following an investigation and legal action by the Fair Work Ombudsman, the café operators have now been penalised a total of $196,000.

Lai and Liu have each been penalised $28,000 and their company, Sakuraya Warrigal Pty Ltd, has been penalised a further $140,000, including record-keeping penalties.

Judge Salvatore Vasta has also ordered that they fully rectify outstanding wages and entitlements of $54,594 (plus interest) owing to their former staff.

Further, Judge Vasta instructed that costs of more than $12,000 be paid to the Fair Work Ombudsman towards the cost of flying witnesses from overseas to Brisbane for the litigation.

This is the first successful costs Order sought by the Fair Work Ombudsman in relation to international witness travel for a trial that did not proceed.

Under the Fast Food Industry Award, the casual employees were entitled to receive more than $18 for ordinary hours and penalty rates ranging from $21 to $50 for weekend, weeknight and public holiday work.

The Court heard that the employees, whose main duties included making specialty teas, were often promised higher pay rates if they passed "tea-making tests" set by their employer - only to have their wages docked for the cost of the drinks made when they were deemed to have failed.

The Fair Work Ombudsman says the Agency took legal action because of the employer's refusal to rectify the back-payments and because Liu had previously been apprised of his workplace obligations following complaints from other employees of an associated entity of the business dating back to 2012.

After their late admissions, Lai and Liu made a series of submissions in Court about why they believed they should receive only a fraction of the applicable maximum penalties.

These included that as Taiwanese nationals, English was their second language and they did not fully understand their obligations to employees in Australia.

They also asserted that the employees never complained about being paid $10 an hour and that their accountant had failed to advise them of their record-keeping and pay-slip obligations.

Further, Lai and Liu indicated they felt "insulted" that for the purposes of determining Award coverage, their cafes had been classified as fast-food outlets and not restaurants.

They also claimed they had wanted to back-pay the employees, but did not have their bank details - and submitted that a large penalty was not appropriate because their small business had made losses over successive years.

The Fair Work Ombudsman says says the penalty decision is a strong wake-up call to employers who think they can ignore their workplace obligations, noting that deliberate underpayment of employees is not tolerated by the Courts or the community.

The Fair Work Ombudsman says the Agency went to considerable expense to pay for travel and accommodation for overseas witnesses and by imposing costs of over $12,000 against the respondents, the Court recognised the unreasonable act of making admissions at the 11th-hour in circumstances where they knew the Agency would incur significant costs and no new evidence was submitted to prompt the late admissions.