Investigation
What started as a vent on social media has exposed an endemic pattern of young workers being exploited. We lift the lid on one university town’s sorry record – but the problem is nationwide.
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Clearing table after table of empty beer and wine glasses in a busy bar, Ashleigh Mounser realised she was being had. The four-hour shift at the Howlin’ Wolf was pitched to her as a job try out. But there was no training, no job at the end – and no pay.
“The owner made no effort to train me in making drinks,” says Mounser. “He mostly used me to collect glasses from the tables on a busy Saturday night, which is a strange time to genuinely train someone.”
It was not the first or last time she would feel ripped off.
After working at one charcoal chicken outlet for $12 an hour – well below the award wage for her age – Mounser was offered just $10 an hour to work at another outlet in the same chain the following day.
Like many in her generation, the University of Wollongong creative writing graduate was caught in Australia's burgeoning world of underpayment – where lip service is paid to industrial laws that are strict on paper, but loosely enforced.
“They just wanted some free labour.”
When a frustrated Ashleigh Mounser was offered $10 to $12 an hour at three different businesses, she decided to vent on a Wollongong University Facebook site and asked fellow students if they had had similar experiences. She was quickly inundated with similar stories from other students.
Ashleigh claims she was underpaid at Kings Charcoal Chicken in Thirroul and offered just $10 an hour cash to work at Kings Charcoal Chicken in Corrimal. That matched the offer she got from the Crazy Noodle Shop in West Wollongong.
“Young people are exploited particularly in Wollongong because it is a university town and people are desperate for work and desperate for money. Employers have got a never-ending influx of students.”
Last year Ashleigh took a job at the age of 21 at the Square Cafe in Wollongong that paid $15 an hour cash in hand. She says she and her co-workers were denied breaks and penalty rates. Her salary was eventually increased to $17 an hour when she was promoted to “head waitress”, but her job was terminated soon after because she was “too expensive to pay”.
She trained people on unpaid work trials that lasted eight to 10 hours a day. “They would have three or four trials a week and as far as I knew they were overstaffed and not looking to hire anyone. They just wanted some free labour and didn’t want to have to pay people.”
Nick Noorie, director of the Kings Charcoal Chicken family businesses in Corrimal, Thirroul and Figtree, says employees aged 21 and over should be paid $18.99 an hour on a part-time basis and $23.74 as casuals. “This is a complaint they should take to Fair Work if they have a problem,” he says. “But this is the first time I’m hearing of it.”
Noorie denies any employee at his three charcoal chicken businesses had been paid below award rates or cash in hand. “If I find out anyone is doing that at my businesses, they would be sacked on the spot.”
Peter Yane, who owns the Crazy Noodle Shop, says he took over the business in recent months and pays employees $18 an hour. “I have only been here a few months,” he says. Yane says he is unable to provide contact details for the previous owner.
When asked about the free trials, a manager at Square Cafe says simply: “Really?”
He then refers Fairfax Media to another manager, who says he will need to speak to the original manager Fairfax Media had contacted. Further calls are not returned.
United Voice union says Ashleigh was significantly underpaid for her work at Crazy Noodle in 2014, her Square Cafe work in 2015, and her chicken shop work in 2016.
South Coast Labour Council secretary Arthur Rorris says the cash-in-hand payments made to Ashleigh were illegal. He estimates she was underpaid by more than $5 an hour as a head waitress.
“I was so desperate for any kind of money.”MEREDITH CRAVEY, 20 Waitress
Lowest offered rate: $14.70 an hour
One night alone at home, Mounser decided it was time to vent. The forum was the University of Wollongong’s popular Students Buy and Sell Facebook site, and her post about her experience of being ripped off uncorked a rush of similar tales from 67 young people.
“The response was enormous,” says Mounser, a petite 22-year-old with long wavy hair, nose ring and a quietly assertive manner. “I didn’t expect the cases to be as bad as they were. It’s a university town and people are desperate for work and they’re desperate for money.”
Click here to see Ashleigh's full post
The stories that emerged are part of a vast system of cheap or even free labour in Wollongong’s growing hospitality and retail industries that a Fairfax Media investigation and Mounser’s social media experiment have uncovered.
The picture shows that many young people are chronically short-changed and some are paid close to half of what they should legally earn. Others routinely work as many as 20 hours a week unpaid as part of so-called “work trials” that can last entire days or, in some cases, weeks
These stories are backed by new research that shows the systemic exploitation of workers under the age of 25 in cafes, restaurants and shops threatens to put downward pressure on wages overall in a region where youth unemployment sits above 16.7 per cent – more than double the national jobless rate of 5.6 per cent.
In some parts of Australia, youth unemployment is as high as 20 per cent. Could the situation in those areas be worse?
South Coast Labour Council secretary Arthur Rorris, who first assessed Mounser’s research, says she has uncovered a culture of exploitation.
“One thing is certain,” he says. “Given the scale of this scandal, if it’s happening in Wollongong it’s happening everywhere.
“This is clearly not a case of a few bad apples. This is a rotten business culture. It's as if these business owners believe they have a green light to break the law and exploit young workers.”
Rorris says many young workers are fearful of speaking out, let alone demanding their rights. “If this was happening to their bosses, they would be calling for a royal commission.”
“Businesses are definitely taking advantage of university students.”
When Lucy found out the premium restaurant she was working at was paying her $6 an hour less than she could earn at McDonald’s, she knew something was wrong. “When I first started working I thought the pay rate was unusually low,” she says.
She questioned the rate and was told it was correct, but some research revealed she should have been paid at least $17 to $18.47 an hour for serving food and alcohol to tables – not the $12.45 she received for her eight-hour shifts at the Lagoon Restaurant.
“It usually meant the next day that I didn’t have any energy. I was sleeping in. It took up my weekends,” Lucy says. “Uni was jam-packed full of classes and I really had no down time.”
Lucy’s then employer, Lemi Stipcevic, told the teenager she was not entitled to an adult wage. “I note that you had been paid the appropriate rate for the shifts that you worked based on your age,” Stipcevic said in an email obtained by Fairfax Media.
Lucy now has a new job, which she loves, at a local pub that pays her $23.50 an hour, but many of her friends struggle on below-award rates. “Businesses in the Illawarra are definitely taking advantage of university students and the fact that they need a job so badly that they would do anything to work,” she says.
Lagoon Restaurant marketing manager Jonni Nicolaou says the full-time rate for a junior worker aged 18 was $12.50 an hour at the time Lucy was an employee. The rate has since increased to $12.75 for employees aged 14 to 20 who serve food and drinks to tables.
United Voice union says Lucy should have been paid at least $18.47 an hour as a part- time rate or $23.09 as a casual.
South Coast Labor Council secretary Arthur Rorris estimates Lucy was underpaid between $600 and $1000.
The exploitation of workers in cafes, restaurants and shops is especially bad in areas of high youth unemployment, such as the Illawarra, where young people will do almost anything to support their studies and get work experience.
The region has lost 4500 manufacturing jobs since 2001. Jobs in the mining sector have almost halved from 4100 to 2200 in the past five years.
University students compete with out-of-work miners and steelworkers for low-skilled jobs in hospitality that some of which, illegally, pay below award rates.
“I felt used and helpless.”
Rashid worked three days for free in September 2015 on the promise of a job that would pay him $16 an hour. But when he completed his five-hour unpaid trial shifts at Time and Taste Indian Restaurant in Woonona, he was instead offered $12 an hour. After just one day of paid work as a waiter, he was never called back.
“I definitely felt they took advantage of me because I was ready to take whatever they offered me,” he says. “I was feeling very disheartened. I felt used and helpless.”
A friend who was being paid $50 a day lost his job when Rashid arrived to do the unpaid trial. “When I got there they got rid of him and I was working for free,” Rashid says.
Rashid, who is an international student from Pakistan on a 50 per cent scholarship, said he knew of other students who were being paid $12 an hour at other businesses. “There are a lot of students in Wollongong – international and local – who are being underpaid. Especially in cleaning jobs,” he said.
The owner of Time and Taste Woonona, who declined to give his name, says he took over the business eight months ago and does not conduct free work trials at his restaurant.
“Nobody does unpaid trials here. Our kitchen staff are the only people who need to be trained,” he says. “The only people we need apart from the chef and me are people who can mop the floors and wash the dishes and do deliveries.”
The owner says he sometimes paid employees in cash. “There is no fixed rate – it depends on the nature of the work and the requirement.”
United Voice union says Rashid was “massively underpaid at $12 an hour”. He was underpaid between $6.50 and $10 for ordinary hours, and much more for weekends and public holidays. The work trial was illegal. He was performing work and the law says he should have been paid. It is questionable if a waiter really needs a work trial, but it should not have been more than half an hour.
“It was all cash in hand.”BRIAN SIBANDA, 26 Takeaway food worker
Lowest offered rate: $15 an hour
Ashkan Masouman, an economist at the University of Wollongong, says the only alternative employment the Illawarra provides for out-of-work steelworkers is in hospitality.
“Compared to any other business it requires a minimum level of experience and minimum level of education,” he says. “That increases the competition for jobs in the hospitality sector which would also put pressure on employers to pay less wages.”
As a result, some people are being paid $10 to $12 an hour instead of the legal rate of about $17 to $18.
Many workers find the system of award wages too complex to decipher. When their employer tells them they are being paid the correct rate, it is often difficult to challenge.
And while employers can rightly claim to be paying the minimum national award rate, they may still be underpaying employees entitled to weekend penalty rates or an extra loading for serving alcohol to tables.
The problem is national. Paula McDonald, Professor of Work and Organisation at Queensland University of Technology, is about to publish new research on young people in south-east Queensland and South Australia that reveals how widespread underpayment is across the country.
After conducting 120 in-depth interviews with young people studying at university, TAFE and private training providers, she finds many are in unpaid work.
“What came out of those interviews unexpectedly for the vocational and pre-vocational students in particular was this issue of unpaid work,” she says.
“It is a well known phenomenon amongst university students, with the work-integrated learning push from employers, students and the universities.”
What is less well understood is that unpaid work seems to be an increasing phenomenon among young people who are disadvantaged and not at university.
“It is a consequence of an ever-tightening labour market,” McDonald says.
Not only are employers looking for free labour, young people are putting themselves forward for unpaid work trials in the desperate hope they lead to a job.
“I deserve more respect than this.”
Getting sick was no way out of a shift at the Outback Steakhouse for Kiara. After toughing it out with colds she finally had enough when she had to get her infected wisdom teeth removed. “I had to take painkillers and it hurt to move my jaw,” she says. “They didn’t believe me when I said I was too sick to come into work.
“I thought: ‘This is enough. I deserve more respect than this. I deserve to have time off’ - and I just had to quit. You need to have sick days. You need to be able to say, ‘Hey, I’m not well enough to serve 50 people tonight.’”
Kiara, a second-year psychology student, initially earned $11.80 an hour at the steakhouse. That rate was increased to $13.68 when she turned 19. “I was pulling about $150 per week, which did not cover rent or bills,” she says. “I hated the job. We weren’t respected as staff.”
When Kiara resigned, she says her boss told her she might be back because “it’s hard to find a job out there”.
After leaving the job, it took her two months to find a new job that now pays her $24.50 an hour. “It’s much more reasonable, and I realise now what I was missing out on.”
Mike Palmer, director of the Outback Steakhouse restaurant chain, insists that Kiara had been paid correctly at $11.80 at age 18 and $13.68 an hour at age 19 in 2014. “We are paying the correct rates. I won’t tolerate people being paid under the rate,” he says.
He says pay and conditions are laid out in an enterprise agreement approved by the Fair Work Commission and part-time employees receive entitlements for holiday leave, superannuation and sick leave. Still, Outback Steakhouse has launched an internal review “to ensure its rigorous processes are followed”. The company says it will take “immediate action”, and individuals who believe they have been underpaid should come forward.
United Voice union says Kiara should have been paid an adult rate for food and alcohol service.
South Coast Labour Council secretary Arthur Rorris says she should have received $17.39 an hour.
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When she worked as a senior waitress at the Square Cafe in Wollongong, Ashleigh Mounser says she was routinely asked to train students being churned through unpaid work trials that lasted eight to 10 hours.
“There were almost always trials that never resulted in employment,” she says.
Mounser says she knows of someone in the third week of an unpaid work trial at another business.
University of Adelaide law professor Andrew Stewart says many unpaid work trials are unlawful.
“I don’t think there is too much of a grey area here legally,” he says.
“It is totally reasonable if you want someone to work as a barista that you get them to spend an hour or so making cups of coffee to make sure they can actually do it.”
But when it stretches into a full day or several days’ work, that is clearly wrong.
“If it is one or two bad apples, then maybe that is not so serious,” Stewart says. “But when a particular practice becomes the norm in an industry, even the most well-intentioned businesses are almost dragged into copying those poor practices because they think it is the only way they can compete.
“Every job I have had in Wollongong has underpaid me.”
In Malaysia, Nathan Subanness earned the equivalent of $4 an hour in marketing jobs.
So when he moved to Wollongong in 2012 to study accounting at university, he thought he was on good money at a cafe. “I thought $14 was a lot of money,” he says.
“That was before I found out about Fair Trading and how much I was supposed to be paid – about a year later. Every job I have had in Wollongong has underpaid me.”
Nathan was also paid as little as $14 an hour at Masaki Sushi, a job he left in July this year. After raising the matter of his low pay with a new boss, it was bumped up to $19 an hour. “He looked at cutting part-time workers and increased wages for full-time staff,” Nathan says.
Nathan also worked for a brief period at Saigon Senses where he says he was initially offered $20 an hour but received only a $12 an hour “training wage” for four days before the restaurant let him go. He says he received $270 in cash in an envelope for the four six-hour shifts.
“This whole underpayment cash-in-hand is common, especially among international students and local students,” he says. “I have friends who have cleaning jobs who get $10 per hour and odd hours that interrupt their university life. They struggle to make ends meet.”
Nathan now works as a trainee restaurant manager in Sydney and has also built his own technology start-up company. He says his commerce degree has taught him how difficult it can be for a business owner. “If you want a competitive advantage, you need loyal staff,” he says.
Jungsun Kim, who now runs Masaki Sushi, says she has paid employees more than $19 an hour since she took over the restaurant earlier this year. She says she does not know what rates the previous owner had paid staff.
Saigon Senses co-manager Bao Dang says the restaurant does not pay an hourly rate, but paid $90 for a four-hour trial shift. However, text messages from Dang to Nathan show Nathan was paid $270 for four six-hour shifts across four days, minus 30-minute breaks for each shift.
In one message, Dang tells Nathan that training shifts are normally $10 an hour but “for you it’s 12. 4 days 6 hours minus 30 minute breaks. So it’s 5.5 [hours] per day except some days that [you] stay back longer which was Wednesday.”
In an earlier text message sent on June 26 this year, Dang says: “I’ve been looking at my books and I can only offer u 14 cash rather than 19 then 14. We simply don’t make enough to do more than that. I’ll understand if u don’t think it’s good enough.”
South Coast Labour Council secretary Arthur Rorris said Nathan had been paid below the minimum wage of $16.37 an hour and underpaid by at least $5 an hour.
United Voice union says Nathan was clearly underpaid in both cases.
As employers discover they can get people to work for free, they start retooling their business model to take advantage of that, says Jim Stanford, an economist and director of the Centre for Future Work at the Australia Institute.
“That means they are going to be even slower in creating permanent jobs or full-time jobs. If you can have a certain share of your labour met through rotation of interns, then why bother advertising a permanent paid position?” he says.
“The only way that employers can succeed in this type of unethical practice is because job opportunities for young people are so scarce. It is becoming a universal phenomenon.”
“I was being exploited and undervalued.”
At first, Hannah Hughes refused to work for $12 an hour as a waitress. But when the then 19-year-old couldn’t find another job, she decided she had to put up with it. “All of the staff was paid that rate,” she says. “Some were offered $10 per hour.” After six months her wage increased to $15 an hour.
Within two years, with the owners overseas, Hannah says she virtually managed Samaras Restaurant in Wollongong, creating the roster, ordering stock, running the kitchen and managing staff. Working 60-hour weeks, she was paid $17.90 an hour. “There was no justification for being paid that wage,” Hannah says. “It was very demeaning to know that was all you were worth.”
Hannah, who moved to Wollongong from Canberra to study law and journalism, felt essential to the restaurant but her pay didn't reflect it. “I definitely felt like I was being exploited and undervalued.”
Since quitting the job at the end of 2014, she has found another one that is better paid. “I am one of the only people I know now who is being paid the award wage out of my friends.”
Restaurant owner Mohamed Nemer says the rate of $15 an hour and $17.90 “sounded about right” but denied paying other employees lower rates. He says Hannah was welcome to come back and see his accountant to sort out any discrepancy. “I am more than happy to sort that issue out,” he says. “There is always room to fix things up. This is a good wake-up call if we are doing any mistakes, because there are always mistakes in the business.”
Nemer says he employs seven or eight permanent workers on “a full wage” and about four casuals, and they all go home with a free meal and drink after work. “People do adore us for what we do in the community,” he says. “My son serves food once a month to more than 150 homeless and got a certificate from the lord mayor for that.”
United Voice union says Hannah should have been paid $18.64 an hour at the age of 21 in 2014.
South Coast Labour Council secretary Arthur Rorris said Hannah was paid below the minimum wage of $13.51 for her age when she started work in 2013. He says she was also underpaid as a supervisor.
“Most people I know get underpaid.”FRANCES JOHNS, 20 Waitress
Lowest offered rate: $0
A shift at Bella Portofino
On a hot Sunday night in February this year, Frances Johns is among a group of at least six Wollongong University students who are busy serving food and drinks at a crowded wedding reception at the Bella Portofino function centre.
Located on Atchison Street in central Wollongong, just a short walk from the railway station, the Bella Portofino markets itself as “the premier function centre in Wollongong” offering “first class food and service”.
Johns “hits the ground running” as soon as she arrives.
“We were serving food and drinks and cleaning up,” she recalls. “It was flat out the entire time.”
As the night wears on, the kitchen floor becomes wet and slippery. Johns has to tip-toe across watery tiles carrying piles of dinner plates. Another student on the unpaid “trial” falls hard on her tailbone, dropping her load of plates. The kitchen staff are abrasive, and when Frances asks for the man she spoke to about the job, no one seems to know who he is.
The hot and flustered wedding guests languish in heavy suits and formal gowns and start complaining about a shortage of ice buckets. The airconditioning is not doing its job. There is plenty of alcohol on the tables, but no mineral water. One guest becomes angry when told she can only have lemonade.
Others are frustrated when another worker, a 23-year-old university graduate, has no idea where to find the butter. “Sorry, this is my first night,” she says.
At the end of the eight-and-a-half-hour shift, she and the others wait to be paid.
It feels like they are the only ones who are not in on a terrible joke when a woman says, “As you all know, this was just a trial.”
“We just all sat there stunned,” recalls the graduate, who does not want her name published. “It was really hard work. They really take advantage of uni students.”
“None of us got paid.”
Blake Roberts didn't get what he bargained for when he turned up to work at a wedding on a Sunday night in February this year. He was one of several students who answered a post on the popular University of Wollongong Buy and Sell Facebook site seeking wait and kitchen staff.
After moving to Wollongong from Wagga Wagga last year, Blake needed a job to support himself at university, where he studies commerce. He accepted the trial shift at Bella Portofino, hoping it would lead to paid work, but he was not called back. “They told me it was going to be a trial shift, but a trial shift is supposed to be a lot shorter,” he says. “None of us got paid.
“In Wollongong, you hear a lot about people being paid below award rates. It is worrying because there are so many students here needing jobs. We get treated unfairly.”
The manager of Bella Portofino, Manuel Paradisis, says he went out of business in December 2015 as a result of serious debt problems. (In 2015, Paradisis faced court over a $100,000 debt owed to an Illawarra wedding business. In July this year, Paradisis pleaded guilty to pocketing almost $18,000 from a fundraising event held at his function centre.)
When asked about the unpaid work trials, Paradisis pointed at interim caretakers who he says were looking to buy the business and had been operating the function centre in February.
Paradisis insists that when he was in business, he would pay for work trials and suggested the unpaid workers who had spoken to Fairfax Media should call him to organise payment.
South Coast Labour Council secretary Arthur Rorris says unpaid trials are illegal and the employer could be liable for backpay.
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Fairfax Media has already uncovered rampant underpayment of 7-Eleven and Caltex employees and there is mounting evidence that the practice spreads nationally through the hospitality and retail sectors.
Indeed, new research shows that rorting has spread beyond areas of high youth unemployment to include domestic and overseas university students in metropolitan Sydney.
Dr Stephen Clibborn from the University of Sydney Business School surveyed 1433 international students and 959 local students living in metropolitan Sydney, many of whom were working in restaurants, cafes or retail.
He says cafes and restaurants, retail and cleaning are “hot spots for underpayment” for both domestic and international students.
With union membership at record lows and only 240 Fair Work Ombudsman inspectors available to police millions of workplaces, Clibborn says small businesses know the chances of being caught underpaying staff are small.
Otherwise honest cafe owners find it impossible to compete with businesses that are undercutting them on wages.
“While 7-Eleven has been the one getting the attention,” says Clibborn, “this is a much bigger problem than just in that organisation.”
Clibborn says the results show that both local students and international students are, on a large scale, being paid less than the law states. “But more temporary migrant workers are being underpaid and the amount they are underpaid is considerably greater than for local students.”
If allowed to continue, underpayment of temporary migrants threatens to put downward pressure on wages in general “and spill over to the next vulnerable group … Australian youth”.
“The pressure really took a toll on my grades.”
For $10 an hour, Sarah worked harder than she ever had, lifting heavy boxes of soft drinks, working with raw chicken and loading a roasting machine. “I’d be called in when I had asked for time off to get assignments in,” she says, describing a 60-hour working week.
The cash-in-hand payments she received at the age of 19 from Kings Charcoal Chicken could not be declared to the Tax Office because her employer had made no record of them. “I had all this money in cash in a university sharehouse that I didn’t feel I could put in my bank account,” she says. “I was more than happy to go on the books because I’m allowed to earn a certain amount, but I had to keep it as cash because they weren’t declaring it.” Sarah believes overseas students who were working in the kitchens were paid even less than her.
Sarah started her course in media and communications at Wollongong University in 2013 and was supposed to finish this year, but now has another subject to go. “That added pressure from that workplace really took a toll on my grades,” she says. “I wished I had never started working at the chicken shop. I didn’t really gain any skills.”
Sarah now works at two restaurants that pay her award rates. “They are both paying me on the books and good wages – $22 to $23 per hour during the week and about $27 per hour on the weekends,” she says. “It’s a big jump.”
Nick Noorie, director of the Kings Charcoal Chicken family businesses in Corrimal, Thirroul and Figtree, says employees aged 21 and over should be paid $18.99 an hour on a part-time basis and $23.74 as casuals. “This is a complaint they should take to Fair Work if they have a problem,” he says. “But this is the first time I’m hearing of it.”
Noorie denies any employee at his three charcoal chicken businesses had been paid below award rates or cash in hand. “We are not allowed to pay cash in hand,” he says. “If I find out anyone is doing that at my businesses, they would be sacked on the spot.”
South Coast Labour Council secretary Arthur Rorris says Sarah was paid below the minimum wage and underpaid by at least $6 an hour.
“I was scared and intimidated.”BETHANY SKINNER, 21
Waitress, kitchenhand, barista
Lowest offered rate: $16 an hour
In the past decade, Australian states have dismantled industrial relations inspectorates that once helped stop businesses from cutting corners.
“These were the agencies with people on the ground checking that businesses and employers are paying the right wage and respecting workplace rights,” NSW Greens MP David Shoebridge says.
“With John Howard's WorkChoices and Labor’s Fair Work laws, all private employees are now covered by the Commonwealth, and states have all withdrawn from the arena. The problem is there have been no federal inspectors employed to fill this space.”
As a result, vulnerable employees, especially young and migrant workers, have no one in their corner to protect them from being exploited. Shoebridge says it’s the “predictable outcome from a decade of workplace deregulation”.
“A lot of employers take advantage.”
Lachlan George was paid on the books for the first four hours of work at Blu Orange cafe but says the remaining 30 hours were paid in cash.
Lachlan, who moved to Wollongong in 2013 to study commerce, said he was paid $15 an hour as a barista and kitchenhand over last summer. “There were no penalty rates on weekends or public holidays,” he says. “At the time I was aware that I was being underpaid and being taken advantage of, but it is quite hard to find a job in Wollongong. I think a lot of employers take advantage of that when they do pay cash in hand.
“Some university students get Centrelink, so employers offer them cash in hand so they can still get full Centrelink.”
A manager at Blu Orange cafe denies paying rates of $15 an hour cash in hand and only paying the first four hours on the books. “It is incorrect,” she says. The manager refused to provide the “correct rate” paid, saying it was private. “From what I know, people are paid on the books. That’s all I can tell you. We won’t disclose what we pay our staff.”
United Voice union says Lachlan’s rate was “way too low” for a 21-year-old, who should been paid normal adult rates.
South Coast Labour Council secretary Arthur Rorris said the cash-in-hand payments were illegal and Lachlan had been underpaid by at least $4 an hour.
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Community legal services are also warning they are struggling to cope with an overflow of demand from an increasing number of exploited workers. This year, the Illawarra Legal Centre helped 170 people with employment law issues. About a quarter involved underpayment and included referrals from the Fair Work Ombudsman.
“The Fair Work Ombudsman send a lot of matters to us,” says Phillip Dicalfas, principal solicitor at the Illawarra Legal Centre.
Some of his clients have been paid $10 an hour below the legal award. “It is common for these clients to tell us that their colleagues are also being underpaid,” he says. “But they’re too scared to complain because they don't want to lose their jobs.”
And with community legal centres around the country set to lose 30 per cent of their Commonwealth funding from July, Dicalfas is concerned that the situation will only get worse. “Our capacity to do the case-by-case work and education work will be severely reduced if funding cuts go ahead next year.”
“I was so desperate for any kind of money.”MEREDITH CRAVEY, 20 Waitress
Lowest offered rate: $14.70 an hour
“It was all cash in hand.”BRIAN SIBANDA, 26 Takeaway food worker
Lowest offered rate: $15 an hour
“Most people I know get underpaid.”FRANCES JOHNS, 20 Waitress
Lowest offered rate: $0
“I was scared and intimidated.”BETHANY SKINNER, 21
Waitress, kitchenhand, barista
Lowest offered rate: $16 an hour
If you believe you have been underpaid, call the Fair Work Ombudsman on 13 13 94 or go to fairwork.gov.au
“I was so desperate for any kind of money.”
Like many young university students, Meredith Cravey is uncomfortable asking for a pay rise. “People my age still feel nervous about approaching bosses to ask for more money,” she says. “Employers take advantage of young people feeling like they have to stay where they are because it is tough finding another job.”
Meredith, who is studying creative arts at the University of Wollongong, was surprised to find out she would get just $14.70 an hour working at the Outback Steakhouse. “I just felt like I had to take the job because I was so desperate for any kind of money and around this area there is so little work, so I just felt I had to take it,” the then 19-year-old says. “It was really frustrating because I worked so hard and I would put so much work into trying to be the best waitress I could be with little to no reward.”
Although the rate she was paid is set out in an enterprise agreement, she believes it should have been higher. Her duties included alcohol service and she says she worked mostly weekends. “There were no penalty rates and long hours. I would get shifts of three to six hours and had lots of late nights. Sometimes I wouldn’t get out until after midnight. It was hard work and you were constantly on your feet. You were lucky to get a drink break. It was tough.”
She left the job in May after six months, tired of the low pay rate and conditions, and has not found work since.
Mike Palmer, director of the Outback Steakhouse restaurant chain, insists that Meredith had been paid correctly at $11.80 at age 18 and $13.68 an hour at age 19 in 2014. “We are paying the correct rates. I won’t tolerate people being paid under the rate,” he says.
He says pay and conditions are laid out in an enterprise agreement approved by the Fair Work Commission and part-time employees receive entitlements for holiday leave, superannuation and sick leave. Still, Outback Steakhouse has launched an internal review “to ensure its rigorous processes are followed”. The company says it will take “immediate action”, and individuals who believe they have been underpaid should come forward.
Under the Restaurant Industry Award, a 19-year-old in Meredith’s position serving alcohol should have been paid $17.29 an hour plus penalties.
South Coast Labour Council secretary Arthur Rorris says Meredith was clearly underpaid because she served alcohol to tables and there was a “strong argument” she should have been entitled to a higher casual rate.
“It was all cash in hand.”
Chemistry student Brian says he was paid $15 an hour at the age of 25 at Soul Origin cafe, where his duties included washing dishes and making sandwiches. Told that “tax” had already been taken out, he was paid in cash. Brian says he stuck with the job because he needed the money for rent and food.
“I knew one guy there who was being paid $10 or $12 per hour. He stayed there because it was hard to find another job,” says Brian. “He wasn’t given any payslips, it was all cash in hand.”
Brian says he was also paid $15 an hour cash in hand at Tamarind Tree Curries restaurant as a 24-year-old.
Brian, who grew up in Griffith, is hoping to do a master’s degree in chemistry next year.
For now, he works at a call centre for award rates of $19 to $20 an hour and receives payslips. He says many overseas students “don’t know they are being exploited”.
Helen Han, the current owner of Soul Origin in Wollongong, says Brian had been paid $15 an hour by the previous owner and head office, but she had adjusted his wage to $20. “My head office paid him $15 and I paid him $20,” she says. “He was a student and could work 20 hours per week.”
A media relations spokesman for Soul Origin head office says the matter raised by Fairfax Media would be investigated. The spokesman says Soul Origin has terminated two franchised stores in the past year “and has ensured the payment of gross wages”. It is also auditing all franchises. “We are concerned by these reports and have conducted a formal meeting with the franchisee, seeking employee files and wage records,” a statement from the company says.
Tamarind Tree Curries co-owner Sachin Nateal says he pays employees under the age of 20 between $14 and $16 an hour, depending on their experience, while older employees would “get more than this”, but would not say how much they received. He denies paying any employees in cash. “We never paid cash in hand to anyone,” he says.
United Voice union says Brian was underpaid in both cases.
South Coast Labour Council secretary Arthur Rorris says paying cash wages is illegal and Brian’s pay was below the minimum wage, which was between $16.37 and $17.29 an hour during the relevant period. He estimates an accumulated underpayment of thousands of dollars.
“Most people I know get underpaid.”
At 3pm on a Sunday afternoon, Frances answered a job ad on the University of Wollongong Buy and Sell Facebook site. Within an hour she received a call from someone representing the Bella Portofino function centre, who asked her to turn up for work an hour later. She couldn’t believe her luck in getting a job so quickly.
What she didn’t realise was that the “flat out” eight-and-a-half-hour shift she would work that night, serving food and alcohol, was an unpaid work trial. “We started at 5pm and finished around 1.30am,” she says. “At the end we had to pack up the event and put chairs and tables aside and clean up the decorations. If I’d known it was a trial shift I wouldn’t have stayed as long as I did.”
The only other unpaid trial she has done was for three hours, which she thought was reasonable. “Finding a job in Wollongong in hospitality, you accept what you can get because jobs are so competitive,” says Francis. “Most people I know get underpaid.”
The manager of Bella Portofino, Manuel Paradisis, says he went out of business in December 2015 as a result of serious debt problems. (In 2015, Paradisis faced court over a $100,000 debt owed to an Illawarra wedding business. In July this year, Paradisis pleaded guilty to pocketing almost $18,000 from a fundraising event held at his function centre.)
When asked about the unpaid work trials, Paradisis pointed at interim caretakers who he says were looking to buy the business and had been operating the function centre in February.
Paradisis insists that when he was in business, he would pay for work trials and suggested the unpaid workers who had spoken to Fairfax Media should call him to organise payment.
South Coast Labour Council secretary Arthur Rorris says unpaid trials are illegal and the employer could be liable for backpay.
“I was scared and intimidated.”
It took Bethany Skinner more than a year to find a job after she moved out of home in Sydney to study creative arts at Wollongong University. When she did find work the then 19-year-old was paid $16 an hour cash in hand at the Passionate Palate cafe, where she was employed for six months in 2014.
Two months after starting, Bethany thought she was being underpaid. She was told to “suck it up”, because childcare workers earn $16 an hour. “I never received a payslip. I always got a blank envelope with cash in it,” she says. “I was desperate for work and naive. I was scared and intimidated.”
Her duties included alcohol service, kitchen-hand work, cleaning, making meals and barista work. “I worked weekends more than any time. On Father’s Day, I worked eight hours straight, no break, no overtime, no Sunday rate,” she says. “I was getting exploited basically.”
Bethany now has a full-time job as a receptionist for a real estate agent.
“I wanted something with a proper salary,” she says.
The owner operator of Passionate Palate, Karen Hall, says: “People who are paid $16 an hour for a trial are put on wages after that.”
Hall declined to disclose the normal wages rate that she paid. “I don’t give out that information, sorry – that’s between me and the employees.”
South Coast Labour Council secretary Arthur Rorris says cash payments are illegal. He says Bethany was underpaid based on entitlements to penalty rates and superannuation and loadings for alcohol service.
United Voice union says Bethany was underpaid based on alcohol service.