A Canberra massage parlour has shut down owing more than a million dollars to workers and to the Australian Tax Office.
Liquidators who have moved into Foot & Thai Massage in Belconnen say the debts add up to $670,000 to former staff and $400,000 in taxes.
Earlier in the year, the operators at the time were found guilty of unfairly dismissing two of their foreign massage staff. More cases are being brought relating to the remaining staff who were brought from the Philippines.
There's no suggestion that the current operators or owners were responsible for the underpayment or ill treatment of staff.
Last year, the Fair Work Ombudsman alleged that seven Filipino workers had been underpaid a total of more than $900,000. In March this year, two of the staff won almost $40,000 in compensation after the Fair Work Commission found they had been unfairly dismissed in 2015.
The Ombudsman, Natalie James, said at the time that "the matter involves some of the most shocking allegations of exploitation her agency had ever encountered."
The agency said seven workers "were deliberately targeted because of their vulnerability".
The workers were told, according to the government's workplace regulator, that "their families in the Philippines [would be] killed if they complained to the department responsible for immigration".
The workers were locked in a house in Canberra and ferried to work each day in a van, according to the Ombudsman.
Now the business has closed. A sign on its website says: "Dear Valued Members and Guests, foot&thai Massage has been placed into Liquidation."
The liquidators, Jirsch Sutherland, which is officially responsible for trying to sort out the company's debts, told The Canberra Times that "approximately $670,000 is owed in relation to outstanding employee entitlements, which is currently subject to ongoing proceedings with Fair Work Australia".
The liquidators expected the amount owed to rise.
On top of the unpaid wages, the liquidator said that "$400,000 is owed to the ATO".
Some money is also owed to people who might have paid for a massage they never received but this is not thought to be a large sum compared with the amount owed in wages and taxes.
According to the Fair Work Ombudsman in a statement last year, the allegations were that:
- "the seven workers were required to work an average of 65 to 68 hours per week - generally working from 9.45am to 10-10.30pm six days a week - but were generally paid for only 38 hours a week.
- "six of the employees were also required to pay $800 per fortnight of their wages back over a nine-month period when the owner deemed the shop was not getting enough income and customers.
- "the workers were provided with accommodation at a house in the suburb of Higgins, where the gates were locked overnight in an attempt to curtail their movement outside work hours.
- "they were allegedly transported from the Higgins property to the massage parlour and back in a van each working day."
The conditions for the workers at the parlour came to light after one of the massage workers, Delo Be Isugan, escaped from the workers' house in Higgins on October 26, 2015.
She had heard that she would be fired for starting a relationship with another worker there.
She decided to leave and got out of the locked house. She took her case to the Fair Work Commission alleging unfair dismissal. She said her employer had threatened her with being put on a plane back to the Philippines if she caused trouble.
Evidence given to the commission tribunal was that Colin Kenneth Elvin, then the owner of the business, had told staff they were banned from having relationships in Australia.
The massage parlour's website says the business was established in 2008. "We are the first Traditional Thai massage in Canberra.
"Now open in both Belconnen and Phillip we hope to provide all of Canberra a place to relax and unwind, whatever the occasion. We strive to provide you with a warm and friendly service in a comfortable setting.
"Our skilled therapists have a minimum five years of experience in the industry and specialise in Traditional Thai massages as well as the Thai Foot Reflexology. Our therapists are also trained in other massages such as the Remedial, Sports and Prenatal to name a few."
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