Fair Work Ombudsman has secured record penalties totaling $15.3 million against the former operators of Sushi Bay outlets in New South Wales, Darwin, and Canberra for deliberately exploiting vulnerable migrant workers. The Federal Court found that these operators underpaid their staff by more than $650,000.
The penalties are distributed as follows:
- $3.2 million against Sushi Bay Pty Ltd (in liquidation)
- $5.8 million against Sushi Bay ACT Pty Ltd (in liquidation)
- $2.4 million against Auskobay Pty Ltd (in liquidation)
- $2.3 million against Auskoja Pty Ltd (in liquidation)
- $1.6 million against Yi Jeong ‘Rebecca’ Shin, the owner and sole director of the companies.
From February 2016 to January 2020, the companies underpaid 163 workers, mostly Korean nationals on student, working holiday, and 457 skilled worker visas, a total of $653,129. They also falsified records to cover up these actions. Individual underpayments ranged from $48 to $83,968.
The total penalties are the highest ever secured by the Fair Work Ombudsman, surpassing the $10.3 million penalties against the Commonwealth Bank and CommSec earlier this year.
Despite previous penalties and cautions for similar misconduct, Ms. Shin and Sushi Bay ACT continued to exploit their workers. Their actions were deemed ‘serious contraventions’ under the Protecting Vulnerable Workers laws, which carry penalties up to ten times the normal maximum.
Fair Work Ombudsman Anna Booth emphasized the regulator’s commitment to pursuing those who exploit workers, particularly vulnerable migrant workers. She warned, “If you deliberately underpay migrant workers and try to cover it up with false or misleading records, you will be found out and will pay a heavy price.”
The investigation began after two former workers reported underpayment. Inspectors discovered widespread underpayment throughout the Sushi Bay network, including outlets in Carlingford, Campbelltown, Charlestown, Forster, Glendale, Liverpool, Merrylands, Miranda, Miranda Westfield, Parramatta, Penrith, Rouse Hill, Shellharbour, Wollongong, Darwin, and Belconnen in Canberra.
Most of the underpayments were due to inadequate overtime rates, with some overtime hours paid at flat cash rates of $14 to $18.50 an hour, despite workers being entitled to overtime rates of $25.94 to $48.24 an hour under the Restaurant Industry Award 2010. Minimum wage rates, weekend and public holiday penalty rates, and annual leave entitlements were also underpaid. Sushi Bay Pty Ltd knowingly made false records and provided them to the Fair Work Ombudsman.
Twenty workers on subclass 457 visas were subjected to unlawful cashback arrangements, requiring them to return part of their wages. Ms. Shin approved and implemented these exploitative practices and was involved in many serious contraventions.
Justice Katzmann found the conduct “both calculated and audacious,” dismissing Ms. Shin’s attempts to deny or minimize her role. Ms. Shin had “a history of dishonesty,” and the penalties should send a strong signal to employers that such conduct is unacceptable and economically irrational.
In addition to the penalties, Justice Katzmann ordered the companies to back-pay all workers. If the companies, now in liquidation, cannot provide the back-pay, part of Ms. Shin’s penalty will be used to rectify the underpayments. The only remaining Sushi Bay outlet, located in Campbelltown, is under the liquidator’s control.
Justice Katzmann also recommended referring Ms. Shin to the Australian Taxation Office, the Department of Home Affairs, and the Australian Securities and Investments Commission.
The Fair Work Ombudsman has established a new tripartite reference group to improve compliance in the fast food, restaurants, and cafes sector, enabling increased collaboration with key stakeholders.
If you are experiencing exploitation or underpayment issues as a migrant worker, or encountering any migration legal matters, NB Migration Law is here to help you.