Shellharbour sushi store fined $200,000 for ripping off workers

The operator of a NSW sushi outlet and his accountant have been ordered to pay penalties totalling almost $200,000 for their roles in an unlawful internship program that ripped off young overseas workers.

The Federal Circuit Court handed out penalties against Kjoo Pty Ltd, the company that operates the Masaki sushi outlet at Stockland Shellharbour, south of Wollongong, after three foreign workers were underpaid at total of $51,025 between September 2014 and July 2015.

The women - aged 20 and 21, who spoke little English - came to Australia from South Korea on 417 working holiday visas.

The Fair Work Ombudsman (FWO) discovered the underpayments after it received requests for help from the workers. The FWO began legal proceedings against Kjoo Pty Ltd in June 2016.

In a recent judgment, the court penalised the company $161,760 and fined its manager and part-owner Hyo Jun "John" Kwon $32,352.

Kjoo's accountant Ok Gyu Lim, the director of accountancy firm Hanlim, was ordered to pay $4608 for his role in preparing false records submitted during the FWO probe.


The exploited workers studied at a private Korean college, with which Mr Kwon and his company entered into a so-called "internship agreement".

The college encouraged them to come to Australia for work experience.

The women were paid flat rates of between $12 and $13.50 an hour in cash under the purported internship, with each working four to six days a week and averaging more than 38 hours.

The FWO said the agreement was not authorised under Australian law and the work performed was not a formal part of the workers' college studies. They should have been paid under the Fast Food Industry Award.

Judge Philip Dowdy found that Mr Kwon knew the workers were entitled to be paid as per the award and should have received minimum hourly rates of $16.67 to $18.99 plus casual loadings, as well as penalty rates of between $23 and $47 an hour.

Unlawful deductions were also made from the workers' wages for accommodation.

When the FWO asked for records, Mr Lim, on Mr Kwon's advice, created false pay records purporting to show the workers were paid much higher wages than was actually the case.

Judge Dowdy said there was a "deliberate, intentional and informed decision by Kjoo, through Mr Kwon, to underpay the employees to gain a financial advantage for its business".

"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," he said.

The creation of false documents was "the highest level of dishonesty", he said.

The workers were back-paid before the court action.

In 2016, a Fairfax Media investigation uncovered dozens of young workers allegedly underpaid - or not paid at all - by their employers across Wollongong.

Thirteen workers from the hospitality sector shared their stories as part of the investigation, which was sparked by University of Wollongong graduate Ashleigh Mounser.

Illawarra Mercury