Hero Sushi franchisees and payroll officers have been handed a record $891,000 in fines for underpaying workers, after a Federal Court judge sought to ensure wage theft was not seen as a “cost of doing business” in the fast food industry.
Two businesses operating three sushi outlets Queensland, New South Wales and the Australian Capital Territory were fined $225,000 and $150,000 respectively for just over $700,000 in staff underpayments between April 2015 and July 2016.
In the latest case prosecuted by the Fair Work Ombudsman (FWO) as Australia grapples with systemic wage theft, the court heard 94 workers were paid flat rates as low as $12 an hour, more than five dollars below the then minimum hourly rate.
The owners of the franchises, who were fined $85,000 each, also provided FWO inspectors with hundreds of pages of false information on nearly a dozen separate occasions in an attempt to deliberately conceal the underpayments, the court found.
Three payroll officers working at Hero Sushi’s head office were also fined a combined $121,000, with the court finding each individual knowingly aided in the breaches of workplace law.
Justice Geoffrey Flick said the high penalties were set to ensure they aren’t seen as a “cost of doing business” in the fast food industry, which has been rocked by dozens of wage theft scandals in recent years.
“Those in a position to ruthlessly take advantage of others pursued their goal of seeking to achieve greater profits at the expense of employees,” he said.
“In doing so, a great number of false documents were deliberately and repeatedly created with a view to concealing the fraud being perpetrated. Lies were told to cover up the wrongdoing.
“It was only when the ‘game was up’ that those responsible admitted their misdeeds.”
The FWO initially discovered the underpayments when undertaking an audit of the businesses in 2016, as part of its ongoing focus on the fast food, retail and cafe industries.
Ombudsman Sandra Parker said the case demonstrates the seriousness of the crime, particularly as young visa workers were involved in the underpayments.
“The penalties imposed against Hero Sushi are the largest ever achieved as a result of a Fair Work Ombudsman litigation and demonstrate that employers who deliberately exploit vulnerable workers will face serious consequences,” Parker said.
“Employers need to be aware that penalties for serious falsification of records have been increased since the conduct occurred in this case and any employer engaging in this sort of conduct today can face even higher penalties and sanctions in court.”
SmartCompany contacted Hero Sushi for comment but did not receive a response prior to publication.
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