Franchising, Legal

Brisbane franchisee taken to court for allegedly paying overseas worker as little as $8 an hour

Priscilla Pho /

Two The Ironing Shop franchisees are facing Federal Court for allegedly underpaying a student employee with wages as low as $8 an hour.

Yuyin ‘Allen’ Luo and Shujing Hou, and their company ANS.HL Trading, own and operate four The Ironing Shop outlets, in Teneriffe, Kangaroo Point, Norman Park and Ascot. Both owner-operators allegedly paid a Chinese national worker a flat rate of $8 an hour, later increased to $12 an hour, over two years, according to a statement from the Fair Work Ombudsman (FWO) released on Friday.

Luo and Hou are also accused of breaching other workplace laws, including failing to pay superannuation, inappropriate frequency of payment and falsifying records.

“The alleged payment of low, flat rates that undercut Award entitlements is completely unacceptable conduct and we treat underpayment of visa holders particularly seriously,” fair work ombudsman Sandra Parker said in the statement.

The total underpayment of $28,404 has been rectified, according to the statement. But Luo and Hou are set to face additional penalties of up to $12,600 per contravention. ANS.HL Trading will also be fined up to $63,000 for each infringement.

This is the third high-profile crackdown by the FWO on franchisees underpaying staff in a matter of weeks. Earlier this month, a Jamaica Blue and Muffin Break franchisor back-paid 14 employees a total $22,317.55. A Geelong Coffee Club franchisee is also facing court for underpaying two underage workers.

“Enforcing compliance with workplace laws in the franchising sector continues to be a priority for the Fair Work Ombudsman,” Parker said.

“Employers in this sector are on notice that they must pay all employees according to Australia’s lawful minimum pay rates.”

Speaking to SmartCompany, Dushan Nikolic, managing associate of immigration law firm Carina Ford, says any workplaces employing overseas workers should conduct regular checks on their employees’ status and entitlements.

“There are three things employers can and should regularly do,” he says.

“The first is to conduct VEVO (Visa Entitlement Verification Online) checks every six months on any overseas workers.

“The second is to check entitlements for award wages through the FWO, and the third would be to consider making a condition of employment for any employees advise them about any conditions or changes to their visas,” he says.

Nikolic suggests both employees and employers should put in the work to fill the “gap in knowledge” that can lead to substandard working conditions.

“Visa holders may be unaware of their rights in the workplace, or in some cases, unfortunately, afraid to speak up to have those rights and obligations met,” he explains.

“And I think some employers are probably just unaware of the visa process and some of the conditions and requirements of it.”

SmartCompany reached out to Luo and Hou for comment but didn’t receive a response prior to publication.

READ MORE: Coffee Club franchisee faces $150,000 fine over underpayment allegations

READ MORE: “Deliberate and conscious”: Business fined $144,000 after misleading ombudsman over underpayment

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Priscilla Pho

Priscilla is a reporter at SmartCompany. You can contact her at [email protected].

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