Take-away food outlet allegedly used unlawful internship program

06 June, 2016 by

A take-away food outlet in regional NSW is to face court for allegedly using an unlawful ‘internship’ program to exploit three overseas workers in their early twenties.

The three women came to Australia from South Korea on 417 working holiday visas and were allegedly underpaid more than $51,000.

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The Fair Work Ombudsman has commenced legal proceedings against Kjoo Pty Ltd, which operates the Masaki sushi outlet in the food court at the Stockland Shellharbour Shopping Centre, south of Wollongong.

The outlet’s manager and part-owner, Hyo Jun “John” Kwon, is also facing legal action over his alleged central role in the underpayments.

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So too is accountant Ok Gyu Lim, a director of accountancy firm Hanlim, for allegedly creating false pay records that were used to try to cover-up the extent of the underpayments.

The three workers had studied at a private Korean college called the Busan Institute of Science and Technology. Two were recent graduates and one was studying a degree in hotel tourism management.

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Kwon and his company entered into a so-called ‘Internship Agreement’ with the college, which encouraged the three to travel to Australia for work experience.

Between September, 2014 and July, 2015, each employee worked four to six days per week, averaging more than 38 hours of work per week, at the Masaki outlet. They were paid flat rates of between $12 and $13.50 for all hours worked.

The Fair Work Ombudsman alleges the three were entitled to receive the minimum rates applicable under the Fast Food Industry Award 2010, as the purported internship agreement was not authorised under any Australian law or administrative arrangement and the work performed at Masaki was not a formal part of the workers’ college studies.

Fair Work Ombudsman Natalie James said that while the company has now back-paid the workers in full, legal action is being taken because of the seriousness of the alleged conduct and significant amounts involved for young and vulnerable workers.

Kjoo Pty Ltd and Kwon allegedly committed multiple contraventions of workplace laws and face maximum penalties of up to $51,000 and $10,200 per contravention. Lim faces a maximum penalty of up to $7200 for two alleged contraventions of workplace laws.

The Fair Work Ombudsman is also seeking Court Orders requiring Kjoo Pty Ltd and Kwon to register with the My Account service and use the educational self-help tools available to employers through Fair Work.