A sushi outlet operator has been hit with almost $200,000 in penalties after being caught running an unlawful internship program that exploited young overseas workers.
Hyo Jun ‘John’ Kwon, manager of the ‘Masaki’ sushi outlet south of Wollongong, was described as ‘the architect’ of the scheme which resulted in three workers being underpaid a total of $51,025.
He was penalised $32,352, and his company Kjoo Pty Ltd, a further $161,760.
In addition, Kyjoo’s accountant, Ok Gyu Lim, was penalised $4,608 for preparing false records that were given to Fair Work inspectors.
How the dodgy internships worked
The three ripped off workers, who were aged 20 and 21, came from Korea on working holiday visas, and knew little English.
Kwon and his company entered into a so-called ‘Internship Agreement’ with a private Korean college where the three women were studying.
Under the dodgy agreement, the workers were paid flat rates as low as $12 an hour in cash, when they should have received minimum hourly rates ranging from $16.67 to $18.99, and penalty rates ranging from $23 to $47 an hour.
The agreement was not authorised under workplace law, and the duties the women performed at Masaki were not part of their formal college studies.
And that’s not all – Kwon also made unlawful deductions from the workers’ wages for accommodation.
Underpayments ‘deliberate’ to gain financial advantage
In the Federal Circuit Court, Judge Philip Dowdy said there was a “deliberate, intentional and informed decision by Kjoo, through Mr Kwon, to underpay the employees to gain a financial advantage”.
“The deliberate targeting of the employees for underpayment is emphasised by the fact that all other employees of businesses associated with Mr Kwon had been paid according to Australian law,” Judge Dowdy said.
“I regard the creation of this false documentation and its submission to the Fair Work Ombudsman as if they were true and correct as the highest level of dishonesty.”
Unpaid internships common form of wage theft
Industrial relations advocate Miles Heffernan, Litigation Director at WAGETHEFT.net.au, said unlawful unpaid internships are a common form of wage theft.
“If you are completing an internship, or a vocational placement, it should be organised through your training organisation, like a college or TAFE or university, and it should be a requirement of you completing your course,” he said.
“In this case, I don’t know how making and serving sushi was a part of these young workers’ Korean studies.”
Mr Heffernan also warned workers that employers cannot make deductions from wages.
“The only time your boss can deduct money from your wages is if you authorise the deduction as the employee, and it must be done for something that directly benefits you, for example, you salary sacrifice so that you can buy a laptop computer through your work,” he said.
“If your employer is taking money out of your wages for training, or for accommodation, or to make up for breakages or mistakes that you make, or to balance the till at the end of the night, then they are breaking the law.”
The Korean workers involved in the dodgy internship scam were back paid in full before the matter went to court.
If you have not received your proper wages and entitlements, or are considering legal action to recover stolen wages, we can help.
Please call our specialist team at WAGETHEFT.net.au on
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