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The former operators of Sushi Bay outlets in NSW, Darwin and Canberra have been hit by record penalties of $15.3 million after being found to have deliberately exploited vulnerable migrant workers, including underpaying staff by more than $650,000.
The Federal Court imposed the penalties against four companies, all of which are in liquidation, that were involved in the business as well as their sole director and owner, Sydney woman Yi Jeong ‘Rebecca’ Shin.
The companies comprise Sushi Bay Pty Ltd, which was issued a $3.2 million penalty, Sushi Bay ACT Pty Ltd ($5.8 million), Auskobay Pty Ltd ($2.4 million) and Auskoja Pty Ltd ($2.3 million). Shin was fined $1.6 million.
The court action, brought by the Fair Work Ombudsman, found that the companies underpaid 163 workers - mostly Korean nationals on student, working holiday and 457 skilled worker visas – a total of $653,129 between February 2016 and January 2020, and falsified records to try to cover it up. Individual underpayments ranged from $48 to $83,968.
The total penalties are the highest ever secured in a Fair Work Ombudsman legal action, eclipsing the $10.3 million against the Commonwealth Bank and CommSec earlier this year.
The underpayments occurred despite Shin and Sushi Bay ACT being hit with a $124,416 penalty in 2019 for deliberately underpaying staff, many of whom were migrant workers, in Canberra.
Shin and another company associated with her which operated Sushi Bay restaurants in Queensland had also failed audits and been cautioned in previous years.
In the latest proceedings, the court found that the deliberate and systematic nature of the conduct meant that some of the breaches were “serious contraventions” of the laws protecting vulnerable workers, attracting up to 10-times the maximum penalties that would ordinarily apply.
“The record penalties imposed in this matter drive home the fact that deliberately and repeatedly exploiting workers, including vulnerable migrant workers, is reprehensible conduct that will not be tolerated in Australia,” says Fair Work Ombudsman Anna Booth.
“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.
“We treat cases involving underpayment of migrant workers particularly seriously, because we are conscious that they can be vulnerable due to factors such as a lack of awareness of their entitlements or a reluctance to complain.
“Employers also need to be aware that taking action to protect vulnerable workers and improving compliance in the fast food, restaurants and cafés sector are priorities for the Fair Work Ombudsman.”
The investigation into the Sushi Bay group was triggered by complaints from two former workers which led to the discovery of widespread underpayment of entitlements throughout the Sushi Bay network.
Many of the underpaid employees were young workers aged under 25 and generally worked as cooks, kitchen attendants and food and beverage attendants.
More than $600,000 of the underpayments related to workers located in NSW, across outlets at Carlingford, Campbelltown, Charlestown, Forster, Glendale, Liverpool, Merrylands, Miranda, Miranda Westfield, Parramatta, Penrith, Rouse Hill, Shellharbour and Wollongong.
There were also underpayments of four workers who had worked at an outlet in Darwin, owned and operated by Sushi Bay Pty Ltd and workers located at an outlet in Belconnen, Canberra, owned and operated by Sushi Bay ACT Pty Ltd.
All outlets traded as Sushi Bay, except for the outlet at Miranda Westfield, which traded as Moduwa Ramen and Bar.
On top of the penalties, Justice Anna Katzmann has ordered the companies to back-pay all workers in full.
With the companies now in liquidation, Justice Katzmann has ordered that if back-pay cannot be obtained from the companies, part of Shin’s penalty should go towards rectifying the underpayment of the workers.
All Sushi Bay outlets have now closed, with the exception of the outlet at Campbelltown in Sydney, which is under the liquidator’s control.
Justice Katzmann has also recommended that Shin be referred to the Australian Taxation Office, the Department of Home Affairs and the Australian Securities and Investments Commission.
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