An international student working as a cook at a Melbourne restaurant was underpaid more than $10,000 because the owner believed he was inexperienced and had agreed to a lower wage rate, a Fair Work Ombudsman investigation has found.

The Korean national, in his late 20s, spoke limited English, was underpaid $10,392 over a three year period when he was employed as a casual cook at the Naked Japan restaurant at Albert Park.  

The Japanese restaurant, which has now closed, started the cook on a flat rate of $14 for all hours worked and gradually increased the rate to $18.

Under the Restaurant Industry Award the employee was entitled to a normal hourly rate of about $22, almost $25 on Saturdays and more than $27 on public holidays.

The underpayments occurred between July 2010 and June 2013. The Fair Work Ombudsman investigated the matter last year after the former employee lodged a request for assistance.

Restaurant owner Gimo Kim told Fair Work inspectors during a Record of Interview that he would have paid the cook more had the employee been more experienced. Kim revealed that he had “asked friends” how much he should pay.

Kim and his company Naked Japan Australia Pty Ltd have signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman, agreeing to apologise to the former employee and reimbursing all outstanding entitlements in full.

Fair Work Ombudsman Natalie James said the EU aims to encourage behavioural change and future compliance with federal workplace laws.

It requires Kim to inform the Fair Work Ombudsman if he establishes any businesses employing workers in the next two years and to engage independent professionals to audit their compliance.

Kim must also provide evidence that he is using a range of educative resources for employers available on the Fair Work Ombudsman’s website and develop systems for ensuring future compliance with workplace laws.  

James said employers must ensure they are aware of the minimum hourly rates and penalty rates that apply to their staff, and pay them accordingly.

“Minimum rates apply to everyone – including visa-holders – and they are not negotiable,” she said.  

There have been a number of reported cases of underpayment in the hospitality industry this year, including an audit of 223 takeaway food businesses, which found 929 employers had been underpaid, and a New Shanghai restaurant in Lake Macquarie allegedly underpaid 85 staff over $580k


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