Sushi operator faces Court for allegedly underpaying overseas workers in Newcastle

3 May 2018

The Fair Work Ombudsman has commenced legal action against the former operator of three sushi outlets in Newcastle for her alleged involvement in underpaying four overseas workers more than $33,000.

Facing the Federal Circuit Court is Lydia Chang, who operated ‘Sushi Revolution’ outlets in the Newcastle suburbs of Waratah, Hamilton and Cooks Hill before her company, Sushi Revolution Pty Ltd, sold the business and went into liquidation in 2017.

Fair Work Ombudsman Inspectors audited Ms Chang’s outlets in 2016 as part of a compliance activity that involved audits of more than 40 sushi outlets across Northern NSW, Newcastle and Central Coast NSW.

Inspectors sought to check whether employees across Ms Chang’s three outlets had been paid their lawful minimum pay rates and entitlements.

However, Ms Chang was allegedly knowingly involved in providing Inspectors with false or misleading pay records for staff.

Inspectors allegedly subsequently determined that Ms Chang was involved in her company’s alleged failure to comply with laws relating to record-keeping and issuing pay slips.

Inspectors allegedly also determined that four employees, all Korean nationals in Australia on 417 working holiday visas, had been paid a flat rate for performing kitchen, customer service and other duties.

The employees required an interpreter to speak with Fair Work Inspectors and two were aged as young as 20 at the time.

It is alleged that payment of the flat rate led to a significant underpayment of the minimum ordinary hourly rates, overtime rates and penalty rates the employees were entitled to under the Fast Food Industry Award 2010 and the Restaurant Industry Award 2010.

Allowances, superannuation and annual leave entitlements were allegedly also underpaid and hundreds of dollars in unlawful deductions were allegedly made from two of the employees’ wages.

It is alleged the four employees were underpaid a total of $33,226 over a period of nine months from January to September, 2016. The alleged underpayments have been rectified.

Fair Work Ombudsman Natalie James says significant factors in the decision to commence legal action included the seriousness of the alleged conduct and the involvement of vulnerable workers.

The Fair Work Ombudsman is seeking the imposition of penalties against Ms Chang.

Ms Chang faces penalties of up to $10,800 per contravention.

The matter is listed for a hearing in the Federal Circuit Court in Sydney on August 15.

Ms James says businesses should be aware that under the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, which came into effect in September last year, the maximum penalties for failing to keep employee records or issue pay slips have doubled to $63,000 for a company and $12,600 for an individual, and the maximum penalty for knowingly making or keeping false or misleading employee records has tripled to $12,600 for an individual.

Ms James says businesses should also be aware that under the new laws, any unscrupulous employer tempted to try to frustrate a Fair Work Ombudsman time-and-wages audit by using false records can now face prosecution in criminal courts.

The new laws apply to conduct that has occurred since the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 came into effect in September 2017.

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