Two Indian cooks are amongst five workers exploited at a caf in regional NSW, coerced into paying back portions of their wages under threat of violence, dismissal and withdrawal of support for their visas.
Record penalties of just over $532,000 have been ordered, with Fares Ghazale, the former owner-operator of the Canteen Cuisine caf in Albury, penalised $88,810 and his company Rubee Enterprises Pty Ltd penalised a further $444,100.
The total $532,910 in penalties is the largest ever achieved as a result of a Fair Work Ombudsman legal action.
The previous record penalties of $408,348 were secured by the Fair Work Ombudsman against a Brisbane 7-Eleven store, in a case which also involved exploitation of overseas workers.
Fair Work Ombudsman Natalie James said the record penalties send a clear message that there are serious consequences for deliberately exploiting overseas workers in Australia.
“These record penalties are a big blow in the fight to stamp out deliberate exploitation of overseas workers in Australia,” James said.
“The minority of rogue employers in Australia intent on preying on the vulnerability of overseas workers should be warned that we will do everything in our power to pursue you and hold you to account.
“Business models built around blatant exploitation of overseas workers are completely unacceptable. They create an uneven playing ground for the majority of business owners who do the right thing and tarnish the reputation of business in Australia,” James said.
The Federal Circuit Court found that Ghazale, who operated Canteen Cuisine caf until it closed in 2014, was involved in multiple breaches of workplace laws in relation to the two Indian workers, including coercion, adverse action, underpayment of minimum lawful entitlements and providing false records. Three Australian employees were also underpaid their minimum entitlements.
The workers, aged in their late 20s, were employed as cooks. The employees faced having to leave Australia within 28 days if Ghazale withdrew support for their visas.
One of the workers had been sponsored by Ghazale’s company on a 457 skilled worker visa and he was in Australia with his Indian wife, who was dependent on his visa to stay in Australia.
The second worker was on a bridging visa while his application for a 457 visa was pending.
Ghazale promised the two workers annual salaries in excess of $50,000 for a 38 hour week when he recruited them.
However, the workers were generally paid flat rates of $1,000 and $830 respectively for working 60 hours per week, including nights and weekends, which was less than the minimum wage and penalty rates they were entitled to under Australia’s Restaurant Industry Award 2010.
In addition to short-changing the workers, soon after commencing employment, Ghazale told the workers they would be allowed to keep only a fraction of their wages each week – which would ultimately result in them being left with as little as $6 an hour.
Ghazale coerced the workers into going to a local ATM to withdraw cash and repaying him large amounts of their wage by threatening to withdraw his support for their visas if they refused.
The employee being sponsored on the approved 457 visa was required to repay Ghazale $11,050 over a period of several months in amounts ranging from $450 to $940 a week.
When the employee complained to Ghazale about the cash-back scam, Ghazale threatened to “contact Immigration” if the employee refused to return the money.
The employee gave affidavit evidence that Ghazale told him: “If anything happens to my business, I will kill you. If you complain to anyone, I will kill you and cancel your visa.”
Similarly, Ghazale coerced the second Indian employee into repaying him $10,680 in cash through weekly repayments ranging from $360 to as much as $2000 one week.
When the employee complained to Ghazale that he was taking advantage of him, Ghazale responded by threatening to withdraw support for the employee’s pending 457 visa application.
The employee later told Ghazale he could no longer afford to pay money back, to which Ghazale responded by shouting at the employee and demanding he repay $500 cash each week if he wanted to get the visa.
The employee stated that at one point during this exchange, Ghazale dragged him by the collar and attempted to punch him. The matter was reported to Albury police.
After the incident, the cook continued working at the caf and continued providing cash to Ghazale.
The combination of the cashback scheme and underpayment of minimum entitlements resulted in the two employees being underpaid $32,063 and $28,858, respectively. Ghazale and his company also underpaid the minimum wages and entitlements of three Australian citizens employed at the caf. A waitress was underpaid $11,273, a cook $8,946 and an apprentice cook $6,766.
Ghazale and his company also contravened workplace laws by knowingly providing false time-and-wages records to Fair Work inspectors and failing to issue pay slips.
The Fair Work Ombudsman’s investigation of the matter was initially sparked by a request for assistance from one of the Australian employees.
In total, the two Indian and three Australian workers were underpaid $87,909.
In addition to the penalties, the Federal Circuit Court has ordered Ghazale and his company to back-pay the five workers in full. In the event that this order is not complied with due to insolvency, the court has ordered that part of the penalties imposed be paid to the workers to rectify the underpayments.
In his judgment, Judge Tom Altobelli found that the treatment of the Indian employees was “grossly exploitative” and described the conduct as “highly aggravating and extremely serious” and “particularly saddening.”
“(Ghazale) exploited his position of power to extract significant sums from each of the employees, and in effect, pay them wages as low as $6 an hour. It is also highly aggravating that (Ghazale) used violence, and threats of violence, to obtain the repayments,” Altobelli said.
Altobelli said that “the disparity between the promised annual salary and the amounts in fact paid demonstrates the particular cruelty of the minimal payments” to the two Indian workers and found that there was no evidence of any contrition or remorse expressed by Ghazale or his company.
“The Court should send a message to Australian employers that there is a single set of workplace protections in Australia that provide a safety net to all employees, regardless of their visa status,” he said.
Altobelli also found that there was a need for general deterrence in the hospitality industry, describing the hospitality industry as being “notorious for non-compliance.”