Employers who showed “reckless disregard” for payment obligations cop $180,000 fine
Monday, August 5, 2013/
Two Tasmanian Japanese restaurant owners have copped a hefty $180,000 fine for underpaying 50 employees. The Federal Circuits Court found 50 employees had been underpaid across the four restaurants a total of $105,738 between 2010 and 2011.
Kazuhiro Kojima and Zhicheng Zhang, who own and operate the Bento Box restaurants in Launceston and Devonport and the Wan Japanese Restaurant in Launceston, have been individually fined $27,984.
The company which operates the restaurants, Bento Kings Meadows, owned by the two men, was fined $122,960.
The case first came to light in January this year following an investigation by the Fair Work Ombudsman.
In another case of mistreatment against vulnerable workers, the employees were predominantly foreign nationals from Asia, some of whom spoke limited English and were international students.
The workers completed cleaning and cooking duties, food preparation and customer service and were paid flat rates as low as $5 to $10 an hour.
Judge John O’Sullivan found Kojima and Zhang had “displayed a reckless disregard for their obligations”.
“The respondents’ submissions on this issue effectively amounted to a plea of ignorance or an assertion that they were so ignorant they didn’t know any better.”
“There is a need for general deterrence and to ensure employers understand they must take steps to ensure correct employee entitlements are paid,” O’Sullivan said in his judgement.
SmartCompany contacted Bento Kings Meadows, but the owners declined to comment.
TressCox Lawyers partner Rachel Drew told SmartCompany employers in Australia know they can’t “arbitrarily set” the rate of wages.
“They know that there are minimum standards for what you can pay someone. You can pay above those standards, but you can’t pay below.”
Individual underpayments ranged from $90 to $12,000 and they have now been rectified in full.
Kojima and Zhang also breached record keeping and pay slip laws.
Fair Work Ombudsman Natalie James recently told SmartCompany the ombudsman will always focus on industries where there are vulnerable workers who are young, migrants or mature age people.
“When we’re thinking about where to invest our resources we look at complaints data, we monitor emerging issues and trends in the media and social media (often early warning) and our stakeholders help us as well,” she said.
“At the moment particular focuses are hospitality and pharmacies and the hair and beauty industry,” she says.