Another day, another company busted for exploiting workers.
The latest scandal, a string of Japanese restaurants paying workers $10 an hour, prompted a judge to go a step further and highlight the added insidiousness of underpayment when the company owners share a similar culture and background to their workers.
The action comes as figures show that more than three-quarters of wage-fraud-related court actions taken by the Fair Work Ombudsman (FWO) involve foreign workers on visas.
The figures reveal that the regulator doubled the amount of money recovered for visa holders to more than $3 million, some of that relating to cases involving franchisees operating under the convenience store giant 7-Eleven.
Separately, 7-Eleven, has so far paid $73 million in back pay to 1869 workers who were mainly students on visas. The payout is expected to exceed $100 million, which is still a fraction of the level of underpayment that has gone on throughout the franchise network over the past decade.
The latest legal action by the FWO involves three Japanese-style food outlets in Brisbane's CBD and Sunnybank, resulting in almost $150,000 in underpayments to five workers over three years.
The Federal Circuit Court slapped a $200,000 fine on the company, Lee Wee Song and Siew Lay Yeoh, after they were found guilty of breaching the Fair Work Act.
Stories of worker exploitation appear in the media – or the website of the FWO – almost every day.
What makes this one stand apart is the observations of Judge Salvatore Vasta, who honed in on a problem that needs to be better understand and monitored: business owners or franchisees hiring workers with similar cultural backgrounds.
In this case, Judge Vasta said the business owners came from Malaysia and they hired workers that were Malaysian. "What that means is there is a deal of responsibility for those who are dealing as employers in Australia undertaking what is fair and just in Australia as far as compliance with the legislation," he said. "There is an obligation on them to ensure that workers from a similar culture to the employers are not exploited."
Importantly, if someone comes to Australia and is employed by someone with the same cultural background, there is an automatic level of trust and comfort. "In many ways, by not complying with the law of this country there has been an exploitation of the five workers that is extremely serious."
Sadly, this isn't an isolated case.
It would be useful to do the numbers on how many of those workers were employed by owners with a similar background.
It is a trend that has hit the radar of the Fair Work Ombudsman, with Natalie James saying she was "increasingly concerned" about the number of employers from "culturally and linguistically diverse backgrounds who are exploiting workers from within their own ethnic communities".
There is no question that many of the franchisees at 7-Eleven, Caltex, Pizza Hut and other sectors, hire workers from similar cultural backgrounds.
Recently Fairfax Media reported that oil giant Caltex had become embroiled in similar allegations of worker exploitation happening across a national franchise network of more than 650 stores.
Allegations of hit men turning up at night to pressure a former Caltex worker to keep his mouth shut, then sending someone to visit his family in Pakistan, some workers paid $12 an hour, some sleeping on mattresses to reduce travel time, some franchisees charging workers for sponsorships, are just a few of the allegations being made by workers and former workers. In many cases, the franchisees are of the same cultural background as the workers they are exploiting.
James said limited English language proficiency, limited work experience and limited or no knowledge of their workplace rights can further contribute to a dynamic where they feel they have little option but to accept the unlawful practices.
She said some of the Fair Work inspectors, when investigating serious underpayments, said they had been told by migrant workers that they "rang around" to find out the "market rate" for Korean or Chinese workers. "Rates that are inevitably well below the minimum wage of $17.70 an hour," she said.
Indeed, a glance at media releases issued by the FWO in the past year shows an alarming correlation between exploited workers and the cultural background of the business owners, managers or franchisees.
Here are a few from the past week: February 3, the operator of the Happytel mobile phone accessories chain was busted for underpaying two Korean nationals in Australia on 417 working holiday visas.
Happytel Retail Group, three of its associated companies and two members of the Ryu family which control the Happytel network have also agreed to donate a total of $7500 to the Asian Women at Work community group and to take a series of measures to ensure future compliance as part of enforceable undertakings (EUs) entered into with the Fair Work Ombudsman.
Two days earlier, on February 1, the FWO busted a Gold Coast Japanese restaurant and company director Kennosuke Saito for underpaying 10 workers and deducting wages from some workers who were visa holders.
Even more shocking was the announcement by the FWO on January 25 that it had taken legal action for wage exploitation against migration agency, ZNZ Education, which specialises in providing services to Chinese clients and is part of the Zhi Nan Zhen Education and Migration Group that operates across Australia and New Zealand.
The workers, Chinese women, were allegedly underpaid a total of $17,039 when they were employed at the company's Brisbane office between April and August, 2015. According to the FWO, the women were paid a flat hourly rate of between $10 and $11.25. One of the workers also received some commission payments.
In a recent speech to the Migration Institute of Australia National Conference, James asked migration agents to help bust the myth that migrant workers aren't entitled to the same wages as Australian citizens.
There is a lot that needs to be done.
It is why the clock is ticking for the Turnbull government to introduce legislation to tackle underpayment.
Employment Minister Michaelia Cash went to the last election promising a $20 million increase to the budget of FWO, tougher powers and penalties 10 times higher than the current penalties. She also promised to change the law to make franchisors more accountable for wage abuse if they fail to deal with worker exploitation in their franchise network.
Underpayment of wages has been going on for years and it is getting out of control. Judge Vasta said in his latest judgment on the Japanese restaurants: "The Fair Work Act enables there to be a maintaining of the social fabric of this country when we are talking about our industrial awards. It is incumbent upon courts to register the community's denunciation of such breaches."
Besides undermining the award system, it creates an uneven playing field for those companies paying the correct wages, enabling the wrongdoers to cut prices and distort competition.
If we aren't careful, it will become a race to the bottom.
