The former operators of a Gold Coast car wash cafe have been penalised $70,000 for an illegal cash-back scheme.
Car wash operators penalised for illegal cash-back scheme
Richard Sang Kyun Kim is the former managing director of the ‘Expresso Carwash Café’ sites at Southport and Labrador.
Chao ‘Tommy’ Liu is the former general manager of the business.
The Federal Circuit Court penalised them $42,432 and $26,520 respectively for the wage theft.
The pair admitted underpaying 59 workers a total of $147,362 across the two car wash sites.
The cash-back scheme
The largest underpayment related to an overseas worker who the car wash underpaid through an illegal cash-back scheme.
The worker, a Korean national in Australia on a 457 skilled worker visa, worked as a full-time cook in the cafes at the car washes.
Kim and Liu forced her to pay back $21,685 of her wages with regular weekly cash payments of between $111 to $715.
The repayments meant she received between $15 and $18.50 an hour.
As a result, the company failed to pay:
- lawful minimum hourly rates; and
- penalty rates for weekend, public holiday and overtime work.
The underpayments totalled $29,528.
“ANOTHER 7-ELEVEN PENALIED FOR ILLEGAL CASH-BACK SCHEME”
Conduct ‘deliberate, intentional and calculated to deceive’
Judge Michael Jarrett described the cash-back scheme as a “deliberate strategy” to pay the worker below the $49,330 annual salary stipulated in her written contract.
Furthermore, he said the scheme falsely maintained “the appearance of compliance with workplace and immigration laws” required for her visa.
Judge Jarrett said the case involved conduct that “is an affront to the minimum employment standards that all employees should expect to receive in this country”.
“There can be no doubt that the conduct in this case was deliberate, intentional and calculated to deceive.”
Workers “not worth” minimum rates of pay
Judge Jarrett also noted that Kim and Liu told Fair Work inspectors that their workers are not “worth” minimum Award rates.
Furthermore, the pair indicated they determined rates of pay somewhere between “the rates of pay from the Fair Work Ombudsman and something from Asian culture”.
What the experts say
Miles Heffernan, Director of Litigation at IR Claims, says overseas workers are particularly vulnerable to exploitation.
“Migrant workers often struggle with English and may not understand their workplace rights,” he said.
“Many also fear losing their visa and consequently their chance to stay in Australia – if they speak up and complain.
“As a result, they are vulnerable to exploitation by greedy bosses.
“In this case, Mr Kim and Mr Liu believe they had a right to determine rates of pay, however, that’s not how laws work here in Australia.
“I hope these penalties will make them think twice before stealing from their workers again.”
The Court ordered Kim and Liu to rectify all outstanding underpayments in full.
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