The operators of three ‘Tokyo Sushi’ stores in regional New South Wales have been hit with a whopping $383,616 in penalties for underpaying workers more than $70,000.
The wage theft was discovered when Fair Work inspectors audited dozens of sushi outlets across South-East Queensland, Canberra, and regional New South Wales.
Kiyoshi Hasegawa was penalised a total of $63,936 by the Federal Circuit Court for her role in the wage theft, which involved 31 employees across three outlets on the Central Coast and in Newcastle.
In addition, two companies Ms Hasegawa and her family own, Hasegawa & Ye International Pty Ltd and Heiwa International Pty Ltd, have been hit with huge penalties of $150,120 and $169,560 respectively.
Ms Hasegawa and the companies involved admitted ripping off 16 employees who worked at two Tokyo Sushi outlets on the Central Coast a total of $48,318 over a period of six months.
In addition they also admitted to underpaying 15 workers who were employed at a Tokyo Sushi outlet in Newcastle a total of $22,567 over an eight-month period.
The underpayments happened because the Tokyo Sushi outlets failed to comply with the Fast Food Industry Award 2010, with workers paid hourly rates as low as $9 or $10.
The result was they didn’t receive the legal minimum hourly rate, casual loadings and penalty rates for weekend and public holiday work.
And, as with most similar cases, the companies didn’t pay superannuation and failed to keep proper wage records.
Most of the underpaid staff were vulnerable workers, either because they were visa holders, or junior employees, including one 17 year-old.
Fair Work Ombudsman Sandra Parker said that improving workplace compliance in the fast food industry is a priority for the regulator.
“Young migrant workers can be particularly vulnerable to exploitation if they are reluctant to complain due to visa concerns or unaware of their workplace rights,” she said.
“The Fair Work Ombudsman takes the blatant underpayment of vulnerable workers particularly seriously, which has been supported by the Court’s substantial penalty.”
Judge says ‘no excuse’ for ‘serious’ wage theft
Judge Philip Dowdy described the contraventions as “serious” and said there was “no excuse” for them.
“The simple fact of the matter is that persons who engage in business activities which necessitate the employment of staff are under a strict obligation to pay their staff the just entitlements of the staff in accordance with law, whether the relevant employer is a major corporation or, as here, a family business,” Judge Dowdy said.
“Employees are entitled to respect and part of that respect is to pay them their full entitlements which must be recognised and known to the employer.”
Judge Dowdy said the penalties should deter Ms Hasegawa and “others who might be inclined to contravene the Fair Work Act in a similar fashion”.
Jail sentences better than penalties
Industrial relations consultant Jeremy Walton from Fair Work Claims, who assists victims of wage theft, welcomed the penalties, but believes that wage theft is a crime and should be treated as such by the courts.
“It’s encouraging to see such huge penalties handed out to such greedy and selfish employers, and I certainly hope it sends a message to other dodgy bosses that they too could end up being bankrupted by ripping off their workers,” he said.
“We still believe that wage theft is a crime, just like all other forms of theft, and as such, it should attract criminal penalties including convictions and jail sentences.
“I bet if we had a government willing to take a stand and change the law, and we started locking up some of these unscrupulous employers, we would see a dramatic reduction in the incidence of wage theft that we unfortunately see today in many industries.”
Most of workers back-paid
Most of the workers have been back-paid what they were owed, but the Court ordered Ms Hasegawa to rectify any outstanding amounts to staff within 28 days.
The Fair Work Ombudsman has vowed to keep the blow torch on industries that are rife with wage theft.
“Inspectors will continue to conduct targeted audits across the fast food, restaurant and café sector and we will hold employers accountable if they are not meeting their lawful obligations,” Ms Parker said.
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