Hero Sushi franchisees and head office payroll have copped record penalties of $891,000 for underpaying workers and providing false records to the Fair Work Ombudsman.
“This is a case about greed and the exploitation of the vulnerable,” said Federal Court judge Justice Geoffrey Flick.
The significant penalties handed out should dispel any idea such behaviour is simply the “cost of doing business” in the fast food industry, he said.
The Federal Court handed out a $225,000 fine to the companies behind the Newcastle and Canberra outlets, with the operators of the Gold Coast Hero Sushi penalised $150,000.
Company directors and owners Deuk Hee “William” Lee and Hokun “Robert” Hwang were each penalised $85,000.
Three members of Hero Sushi’s head office payroll team have been fined $75,000, $16,000 and $30,000.
Justice Flick said “Those in a position to ruthlessly take advantage of others pursued their goal of seeking to achieve greater profits at the expense of employees.
“In doing so, a great number of false documents were deliberately and repeatedly created with a view to concealing the fraud being perpetrated. Lies were told to cover up the wrongdoing. It was only when the “game was up” that those responsible admitted their misdeeds.”
Fair Work Ombudsman welcomes record penalties
Fair Work Ombudsman Sandra Parker welcomed the record penalties from the court.
“The penalties imposed against Hero Sushi are the largest ever achieved as a result of a Fair Work Ombudsman litigation and demonstrate that employers who deliberately exploit vulnerable workers will face serious consequences,” she said.
“Employers need to be aware that penalties for serious falsification of records have been increased since the conduct occurred in this case and any employer engaging in this sort of conduct today can face even higher penalties and sanctions in Court,” Parker said.
The Fair Work Ombudsman took court action in February last year.
The Court found that 94 workers across the three Hero Sushi outlets were paid flat rates as low as $12 an hour, resulting in underpayments of $700,832.88 between April 2015 and July 2016.
Many of the workers were young overseas workers, including Korean and Japanese nationals on international student and working holiday visas.
Inaccurate hours of work and pay rates were recorded on documents provided to Fair Work Inspectors on 11 different occasions.
The court found that each of the individuals aided and abetted or were knowingly concerned in some of the company’s breaches of workplace laws.
Fair Work Inspectors discovered the underpayments when auditing the Hero Sushi outlets at Kotara in Newcastle and Pacific Fair on the Gold Coast, and the Hero Sushi kiosk at the Canberra Centre during a proactive activity targeting sushi businesses in 2016.
The operators underpaid employees’ minimum hourly rates, casual loadings, penalty rates, overtime, clothing allowances and annual leave entitlements under the Fast Food Industry Award 2010. Superannuation was also underpaid and pay slip laws were breached. In total:
- 30 employees were underpaid $215,066.45 at the Newcastle outlet
- 43 employees were underpaid $293,451.26 at the Canberra outlet
- 21 employees were underpaid $192,315.17 at the Gold Coast outlet.
The three companies operating the outlets have back-paid all underpaid employees they have been able to locate and provided the Fair Work Ombudsman with back-pay for other staff members. The FWO will hold the money in trust for the workers until it can locate them.
In addition to the penalties, Justice Flick also ordered the companies to display workplace notices detailing employee rights and entitlements and to commission an external audit of its compliance with workplace laws within 28 days and report the results to the Fair Work Ombudsman.