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Underclass of restaurant employees in Sydney grossly underpaid

Date

Sarah Whyte and Clay Lucas

Yuka Odashima was working at Japanese bar Hihou, and its sister restaurant Izakaya Den, getting paid an illegal flat rate of $15 an hour. She complained, and a week later she got sacked.

Yuka Odashima was working at Japanese bar Hihou, and its sister restaurant Izakaya Den, getting paid an illegal flat rate of $15 an hour. She complained, and a week later she got sacked. Photo: Mal Fairclough

Diners in Sydney’s A-list suburbs are unknowingly exploiting an underclass of employees who are being grossly underpaid, Fairfax Media has found.

Widespread cash-in-hand payments are resulting in hospitality workers being paid more than a third below the minimum wage, which is currently $15.96 per hour.

Fairfax has established restaurants in Manly, Neutral Bay and the northern beaches are paying employees as little as $10 an hour in cash.

The investigation has found the Sushi Bar Taka in Manly paid employees $10 an hour, Sushi Train in Neutral Bay was paying some employees $13 an hour and a northern beaches restaurant was paying $12 an hour.

With loadings and other entitlements, the workers are missing out on up to half the mandated salary they are entitled to.

A spokesman from Sushi Bar Taka said it was ‘‘not correct anyone was getting $10 an hour” but would not say what the hourly rate was, while a spokesperson at the Sushi Train refused to comment.

An underpaid Sydney hospitality employee, who asked not to be named, was recently burnt by boiling oil at work. The splashing oil hit the employee’s arms and face, causing scarring. When the employee took it up with the employer, the manager said the business didn’t have insurance. ‘‘It didn’t surprise me that they didn’t have insurance, when I know they underpay,’’ the employee said.

‘‘Everyone [who] works there didn’t know about the wage system, but they don’t complain because they don’t know about it.’’

Jacqui Swinburne, the employment solicitor from Redfern Legal Centre, said employees were being ripped off in Sydney restaurants and the fast food industry in a practice that was ‘‘widespread’’.

‘‘I have been really shocked by the underpayments,’’ Ms Swinburne said, who has worked at the legal centre for 10 years.

Ms Swinburne said owners often targeted international students who were unaware they were being exploited or paid below the minimum wage until they were dismissed.

‘‘Owners are making huge profits while they are exploiting people at the same time,’’ she said.

Andrew Edwards, a Fair Work Ombudsman investigator who regularly inspects conditions in restaurants, said it was common to find overseas students in particular working for cash in hand once they reached their 20-hour-per-week limit specified by their visa.

‘‘People find themselves in circumstances where the employer wants to give them more hours, but says ‘Let’s do it in cash because you’ve got this visa,’’’ he said.

Mr Edwards said he’d seen rates of between $10 and $8 for hospitality workers. ‘‘We’ve seen rates as low as that.’’

But John Hart, chief executive officer of the Restaurant and Catering Australia Association, said it was the restaurant owners who were getting the raw deal, not the employees.

"The owners businesses are being pushed to the wall where they can’t even afford to not be in their businesses,’’ he said. ‘‘They have to work every weekend because they can’t afford to hire staff to work on the weekend.’’

Mr Hart said it was an ‘‘employees’ market’’.

‘‘They get to choose where they pick work and they get paid incredibly well and that’s the way it is."

Mr Hart did however concede that an estimated 50 per cent of businesses were not compliant with regulations.

"They are opting out of the system and if they stay in the system they are going to go broke," he said.

“It’s a huge problem because the system is forcing them to pay cash in hand. The system is making them go back to opting out.’’

He said it was the smaller, medium restaurants who were not complying.

"The end market... they are the ones under pressure and they are the ones who opt out and they can opt out. They are not in the spotlight."

Among those to complain to the Fair Work Ombudsman, is Yuka Odashima, a Japanese student who until recently worked at the Melbourne Japanese bar and restaurant group behind Nama Nama, Hihou and Izakaya Den.

A recent payslip for the 25-year-old shows she is being paid a flat rate of $15 per hour, plus superannuation.

Ms Odashima said the correct rate, according to the Fair Work Ombudsman, would have been around $21 an hour for much of her work.

‘‘It’s a really busy restaurant and bar and I am pretty sure they can pay proper salary to all staff but they don’t,’’ she said. ‘‘I asked the manager why they pay just $15 and he just started getting angry. He said ‘You can just find another job’.’’

She stopped being given shifts soon after this conversation, she said.

Ms Odashima conceded that she often got tips that supplemented her wage.

One of the restaurant group’s owners, Simon Denton, said Ms Odashima had not been taken off the group’s rosters because she had questioned her pay, but because she was not needed.

And he said his restaurant paid far better than many others. Many of his staff worked for restaurants that had paid them $10 an hour, he said. ‘‘A lot of the people who work for us work for other places for a hell of a lot less,’’ he said.

The Fair Work Ombudsman is now assessing the case.

Contact Clay Lucas directly on clucas@fairfaxmedia.com.au

Contact Sarah Whyte directly on swhyte@fairfaxmedia.com.au

259 comments

  • Every car wash, servo, convenience store does the same. What is new in it. Happened when i came as a student in 2000, happens now. All overseas student violate their visa condition, work overtime, get paid in cash. None of the federal Departments take any action.
    Once in a while if any action is taken, it comes on TV news, program, and we think all is well.
    Not sure if the foreign dollars that students bring in , really outweigh the tax evasion and visa violation. We are not even mentionning , how this results in parralel economy that exist , unchecked.

    Commenter
    SLOW
    Location
    Sydney
    Date and time
    January 18, 2013, 5:56AM
    • I agree with you. Being a welled travelled person I meet a lot of fellow travellers from from all over the world who are forced to work over their allotted 20 hours a week set by immigration. In fact every one of them does. The stories of working conditions I hear from them are horrendous shameful and our visitors get treated like scum. Some of thous young travellers have been ripped of and in paid.

      Employers ask travellers to work for cash, but when it comes time to be paid, often the employer does not pay them. If they work including tax, it is too difficult for them to survive on the allotted 20 hours per week set by immigration.

      Travellers have no choice but to do around 30 hours per week.

      Commenter
      Griffo
      Date and time
      January 18, 2013, 7:10AM
    • I can also tell you that similar exploitation is within professional jobs too, where migrants with skills/aptitudes are underpaid. They are employed as casuals, to avoid all the obligations of paying permanents, but never pay the full hours. The workers feel they cannot leave or complain because they are desperate to get some form of work history in Aus, as there achievements overseas (unless with a multinational) counts for nothing with Australian employers. One such employer works with the immagration law environment.......

      Commenter
      OMG
      Location
      Sydney
      Date and time
      January 18, 2013, 7:44AM
    • Griffo, please don't confuse travellers with students. International students are meant to be here studying full-time (i.e. 40-50 h/wk) and so should not work more than 20 h/wk as this impacts on their ability to do their study. Working holiday visas instead allow you to work full time.

      Commenter
      SJR
      Location
      NSW
      Date and time
      January 18, 2013, 8:19AM
    • Living and working here in Neutral Bay I can tell you this is the RULE, not the exception. In fact I cannot think of any one of the "ethnic" restaurants here that pay anywhere near the minimum, much less any other entitlements. Some family members get no pay at all. But there is the other side of the coin, most of these restaurants wouldn't even exist if they stuck to the rules. It is truly a conundrum.

      Commenter
      luke
      Date and time
      January 18, 2013, 8:21AM
    • This problem has been around for years, unfortunately its swept under the table as long as students are coming in and paying big fees for studying and money pouring into the rental market in Sydney. The only time anything is done about these problems is when a newspaper or tv show brings it out into the open and then back to the usual when all the fuss has blown over. Employers like these exploit these workers as they dont no the rules, regulations and pay rates in Australia. Something needs to be done about this problem by the Dept of Immigration and State and Federal Governments.

      Commenter
      Brian
      Location
      Sydney
      Date and time
      January 18, 2013, 8:24AM
    • Part of getting a Student Visa is you're supposed to show you have funds to support yourself for your stay, so the 20 hours a week should just be an extra pocket money because you should come here with all the money you'll need to live for the duration of your visa. Also when school is "out" you can work as many hours as you like, so you can top up your reserves then if you're here for longer than a term.

      Of course that's not what happens, students borrow money to show a bank statement with appropriate savings to get their visa, give it back and then come here with nothing and abuse their visa conditions just to get by.

      Commenter
      M
      Location
      Sydney
      Date and time
      January 18, 2013, 8:43AM
    • "Being a welled travelled person I meet a lot of fellow travellers from from all over the world who are forced to work over their allotted 20 hours a week set by immigration"

      You're talking rubbish, mate, as are many other people spouting the usual "blame foreigners" rhetoric. Working Holiday Visas and Work & Holiday Visas (two slightly different classes of visa) for young travellers don't have limitations on the number of hours that can be worked per week.

      What's more, the 40 hours per fortnight (not 20 per week) has only been compulsorily in place for visas issued after mid 2008, and not at all for research postgrads, and doesn't apply during vacations. Check for yourself on the Dept of Immigration and Citizenship website.

      Commenter
      Restaurant Express
      Location
      in your coffeeshop, making yor coffeez
      Date and time
      January 18, 2013, 8:57AM
    • Only Australians believe they are entitled to $22/hr + benefits to wait tables and toss fruit into a blender. It's not meant to be a career path, it's meant to provide young people some spending money and build experience for their "real" jobs later on.

      Not to mention, $15 cash-in-hand is worth about $22 pre-tax. Legalities aside, it's a win:win for the employer and employee.

      But whatever. You all want cheap American prices at inflated Australian wages. No wonder your jobs are evaporating.

      Commenter
      Jimmy
      Location
      Not_Oz
      Date and time
      January 18, 2013, 9:14AM
    • Look at service stations. Most now bring in workers on temp visas, set them up 10 to a room, never let them out other than to work & pay them a pitiful wage in comparison to regular Australian workers. This should be stopped!!

      Commenter
      Bazza
      Date and time
      January 18, 2013, 9:16AM

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