Din Tai Fung fined $4m

The FairWork Ombudsman called it ‘a calculated scheme to rob employees’.

Below is the complete media release by the FairWork Ombudsman:

$4m penalties, second-highest ever secured, against former Taiwanese restaurant operators for “a calculated scheme to rob employees”

The Fair Work Ombudsman has secured $4 million in court-ordered penalties against the former operators of three popular Taiwanese restaurants for deliberately and systematically underpaying vulnerable migrant workers and using false records.

The Federal Court has imposed penalties in the amount of:

• $1.99 million against DTF World Square Pty Ltd, which employed workers at Din Tai Fung restaurants at the World Square shopping centre in the Sydney CBD, Chatswood and Emporium shopping centre in the Melbourne CBD;
• $1.89 million against Selden Farlane Lachlan Investments Pty Ltd, which employed workers at the Emporium store;
• $92,232 against former General Manager of DTF World Square Ms Hannah Handoko (also known as Vera Handoko); and
• $105,084 against former HR Coordinator of DTF World Square Ms Sinthiana Parmenas.
• The penalties were imposed after the Court found the two companies committed multiple breaches of the Fair Work Act, including some ‘serious contraventions’ committed knowingly and systematically, which attract a tenfold increase in applicable maximum penalties.

The total penalties are the second-highest ever secured by the Fair Work Ombudsman.

Justice Anna Katzmann found the two companies, with the involvement of senior management, “deliberately deprived the employees of their legislated entitlements and contrived to disguise their wrongdoing through the creation of a false set of records.”

“It goes without saying that the respondents’ conduct was extremely serious. This was not merely deliberate wrongdoing. It was deceitful and unscrupulous. It involved a calculated scheme to rob employees of their hard-earned wages and deceive the authorities,” Justice Katzmann said.

The two companies deliberately underpaid 17 employees $157,025 under the Restaurant Industry Award 2010 and kept and provided false records to Fair Work Inspectors.

The workers were mostly visa holders from Indonesia and China, mainly on student or employer-sponsored visas, and engaged in casual roles. The four full-time employees were sponsored by DTF World Square Pty Ltd. Ten workers were under 26 at the start of their alleged underpayment period.

Five contraventions relating to false records and the underpayment of casual loading and weekend and public holiday penalty rates to casual employees met the definition of ‘serious contraventions’ under the Protecting Vulnerable Workers laws because of the deliberate and systematic conduct.

Under the Protecting Vulnerable Workers laws, the maximum penalties for serious contraventions are 10-times the penalties which would ordinarily apply.

The Court found Ms Handoko and Ms Parmenas were involved in some of the companies’ contraventions. Serious contraventions were not alleged against them.

Fair Work Ombudsman Anna Booth said the penalties, being the second-highest secured in FWO’s history, underlined the seriousness of the offences.

“We welcome these penalties that demonstrate the serious nature of the offending by the respondents in this matter. Their actions resulted in vulnerable migrant workers being underpaid hundreds of thousands of dollars,” Ms Booth said.

“The court has characterised the conduct of Din Tai Fung as “a calculated scheme to rob employees of their hard-earned wages”. The FWO agrees that the underpayment of wages in this matter was extremely serious. Serious consequences await any business found to be engaging in such calculated and systemic conduct such as the type uncovered in this matter.”

“Employers also need to be aware that taking action to protect visa holders and improve compliance in the fast food, restaurant and café sector are among our top priorities.”

“Lawful minimum rates apply to all employees in Australia and they are not negotiable. All workers in Australia have the same rights, regardless of nationality and visa status. Anyone with concerns about their pay or entitlements should contact us for free assistance, including anonymously,” Ms Booth said.

FWO investigated after receiving a request for assistance from an affected worker.

During the investigation, inspectors found 17 employees were underpaid between November 2017 and June 2018, with the exception of one full-time employee, the highest underpaid, whose underpayment was assessed for a longer period from July 2014 to May 2018. The workers included cooks, waiters, a dishwasher and restaurant managers.

The flat hourly rates paid to 13 casual workers and fortnightly salaries paid to four full-time workers did not meet various Award entitlements including minimum rates for ordinary hours, penalty rates for weekend, public holiday and evening hours, split shift allowances, overtime rates, and casual loading. Some workers were also requested or required to work unreasonable additional hours.

During the investigation, DTF World Square and Selden Farlane Lachlan Investments kept and provided both accurate and false records to inspectors, with false records generally understating hours worked and included false rates of pay for casual employees.

In imposing the penalties, Justice Katzmann found the conduct involving workers “particularly vulnerable to exploitation” was “not isolated, ad hoc or inadvertent” and that “numerous concurrent contraventions were committed” by both companies with one worker underpaid over a period of four years and the others underpaid over eight months and multiple pay periods.

“It is difficult to conceive of any circumstances in which the introduction and operation of a dishonest scheme to deprive employees of their statutory entitlements to minimum wages or conditions would ever warrant anything but the imposition of substantial penalties,” Justice Katzmann said.

Justice Katzmann found Ms Handoko and Ms Parmenas were involved in numerous contraventions by the two companies, and Ms Handoko requested or required some workers to work unreasonable additional hours and “created or at least maintained the system of false or misleading record keeping”.

Justice Katzmann also found “both Ms Handoko and Ms Parmenas were involved in setting the unlawful pay rates” and that “Ms Parmenas knew from the time she started working for the DTF Group or shortly thereafter” that the pay slips and records were “false or misleading”.

Justice Katzmann said there was a need for specific and general deterrence given the pair’s seniority and that they had not demonstrated any contrition and there was “no evidence that any corrective action was taken at any time”.

Individual underpayments ranged from $2,165 to $50,588. Most of the highest underpaid worker’s alleged underpayments related to unpaid overtime.

The Court has previously ordered both companies to back-pay the underpaid employees in full, plus interest and superannuation.

DTF World Square and Selden Farlane Lachlan Investments were part of a broader group of companies that operates Din Tai Fung restaurants in Sydney and Melbourne.

After the proceedings commenced both companies were wound up and leave was granted to proceed against them in liquidation.

The FWO filed 138 litigations involving visa holder workers, and secured $15 million in court-ordered penalties in visa holder litigations, in the six financial years to June 2023.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance. An interpreter service is available on 13 14 50. The FWO also has an online anonymous report tool, including options to report in languages other than English. Employees can also seek information from their employer and their union if they are a union member.

The FWO has interactive tools to help employers and employees in the fast food, restaurant and café sector, and employers can also use FWO’s pay calculator and Small Business Showcase. Information is also available for employees and employers at our visa holders and migrants and young workers and students webpages.

The Fair Work Ombudsman has an agreement with the Department of Home Affairs, called the Assurance Protocol, where visa holders with work rights can ask for help without fear of their visa being cancelled.