A sushi outlet operator has been penalised $200,000 for running a dodgy internship program that exploited young overseas workers.
The dodgy internship scheme resulted in three workers missing out on $51,025 in wages.
Dodgy internship program
Hyo Jun ‘John’ Kwon manages the ‘Masaki’ sushi outlet south of Wollongong in New South Wales.
The Federal Circuit Court described him as the ‘the architect’ of the dodgy internship scheme.
It penalised him $32,352, and his company Kjoo Pty Ltd, an additional $161,760 as a result.
The court also penalised Kyjoo’s accountant, Ok Gyu Lim, $4,608 for creating false records provided to Fair Work inspectors.
How the dodgy internship program worked
The three affected workers, aged 20 and 21, came from Korea on working holiday visas, and knew little English.
Kwon created an “Internship Agreement” with a private Korean college where the three women studied.
Under the terms of the agreement, the workers received flat rates as low as $12 an hour in cash.
However, the award required Kwon to pay minimum hourly rates ranging from $16.67 to $18.99. And penalty rates ranging from $23 to $47 an hour.
Judge Philip Dowdy described the internship program as 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.
“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.”
Dodgy internships common form of wage theft
Industrial advocate Miles Heffernan said unlawful unpaid internships are a common form of wage theft.
“Unpaid internships or vocational placements must be organised through a training organisation, like a college or TAFE or university,” he said.
Mr Heffernan also said internships must be a requirement to complete a course, for example, teaching or nursing.
“In this case, I don’t know what Korean studies require students to know how to make sushi.”
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,” he said.
“And you must directly benefit, for example, you salary sacrifice to buy a laptop through your work.
“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.”
Meanwhile, Kwon back-paid the workers before the matter went to court.
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