A former Brisbane Coffee Club franchisee has been fined over $180,000 for forcing an overseas worker pay back $18,000 of his wages in cash and threatening to have his visa cancelled if he refused.
Sandeep Chokhani, who formerly owned and ran the Coffee Club franchise at Nundah Village Shopping Centre with his wife, threatened his Indian cook that he will have the employee’s 457 skilled worker visa cancelled if the latter won’t hand back $18,000 of his wages.
The cook, who is in his late 20s, sought the help of the Fair Work Ombudsman (FWO) after being terminated without notice in November 2015. According to the watchdog, the cook’s contract stated he would be paid an annual salary of $53,900 on a weekly basis, but there were long periods where he hadn’t received wages.
FWO took action against the franchise owner and his company Gaura Nitai Pty Ltd last month. The couple then ceased operating the Nundah Coffee Club outlet last month.
Federal Court Judge Michael Jarrett fined Chokhani $30,000 and imposed a further $150,000 fine against the company he and his wife owned over the illegal cash-back arrangement.
“The exploitation of workers from other countries who are inspired to live and work in Australia with the hope of achieving permanent residency needs to be discouraged, in the strongest of terms whenever it is apparent that it has occurred. This is one of those cases,” the judge said.
After failing to pay the worker any wages for a four-month period from July to November 2014 and a one-month period in February to March 2015, Chokhani and Gaura Nitai paid the worker $19,334 by electronic transfer on April 22, 2015.
Judge Jarrett found that Chokhani then told the worker to withdraw $18,000 in cash and repay it to him or Chokhani would take steps to cancel his 457 visa.
The worker withdrew $18,000 in cash the same day and repaid it to Chokhani.
“(The worker) was in a bind,” Judge Jarrett said.
“He could not leave his employment because if he did so he would breach a condition of his visa and his ability to remain in Australia would be seriously compromised. He was effectively working for nothing.”
The worker lodged a request for assistance with the FWO only after his employment was terminated without notice in November 2015.
When Fair Work inspectors investigated, they found that because of the unlawful cash-back payment, the worker had been underpaid his minimum hourly rates, casual loading, annual leave entitlements, overtime rates, payment in lieu of notice of termination and penalty rates for weekend and public holiday work.
The unlawful cash-back payment and the underpayment of contractual entitlements led to the worker being short-changed a total of $23,546 between September 2013 and November 2015. The worker was back-paid in full earlier this year.
The worker told the Court that the exploitation had led to him incurring credit card debt and needing to borrow money from family and friends.
Fair Work Ombudsman Natalie James says the penalties imposed sent a message about the seriousness of exploiting the vulnerability of visa holders.
“We will do everything within our power to pursue any employer who thinks they can exploit the power imbalance they have over migrant workers they employ,” James said.
“Any unscrupulous employer tempted to engage in this sort of conduct should think again because there are serious consequences for this type of behaviour.”
At the time of the investigation, the Fair Work Ombudsman previously had a proactive compliance deed in place with the owners of the Coffee Club Franchise, Minor DKL Food Group (MDKL). James commended the company’s cooperation through the course of the investigation and its approach to ensuring compliance in its network.
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