A federal judge has expressed disappointment the Fair Work Ombudsman has not pursued wages owed to vulnerable workers by the former operators of a Hobart restaurant who fled to Germany after being busted for unlawfully exploiting staff for 15 months.
Oya Waechter, who owned and operated the Anatolia Restaurant in North Hobart, has been penalised $78,000 for underpaying four workers a total of $32,411, while her husband, Peter Waechter was penalised $22,000.
One worker was paid no wages for three months of work and another worker was paid just $50 cash a week for working two to three days a week for a month.
The FWO, which took no enforcement action after meeting with the couple in 2012 following a complaint alleging similar unlawful conduct, started investigating the Turkish-style restaurant in March 2016 after receiving complaints from staff.
The Federal Circuit Court found an international student, identified as Mr N, was paid between $10.09 and $25.34 per hour from February to November 2015. For the next three months, until his employment ceased in February 2016, he was not paid at all.
Mr N worked 7 days a week from 5pm to 10pm and his duties included greeting and seating customers, taking orders, serving food, cleaning and setting tables, receiving money and training less experienced staff members.
Mr N, who was underpaid $24,800, said his time working at the restaurant was “very distressing mentally”, as he struggled to pay his living expenses and his tuition. Needing to be frugal, he was unable to socialise with friends, and had to apply for an instalment plan to pay his tuition.
He feared he would not be able to continue his studies and would need to borrow money from his parents, or be forced to leave Australia.
Mr S, a Pakistan citizen studying a Masters Degree in Applied Science, is owed $2315 after working at the restaurant for a month as a kitchen hand.
He worked two to three days a week, doing four to six hour shifts, but was paid just $50 a week in cash.
He said he was depressed during his employment, and relied upon savings to pay for groceries, rent and transport.
A third worker, Ms W, 61, is owed almost $4000 after being employed as a casual at the restaurant for four months in 2015. The fourth worker, Ms K was 15 years old when employed as a junior casual in 2015 and paid between $5.54 and $18.35 per hour.
A default judgment was entered against the Waechters in July 2018 and they were ordered to rectify the underpayments within 28 days. But solicitors for the couple told the court in November 2019 that they had relocated to Germany to seek “specialist medical treatment”.
Judge Grant Riethmuller said the couple had deliberately engaged in the “significant exploitation of employees who for the most part, were never paid”.
The restaurant ceased trading In December 2016, leaving large debts including an Australian Tax Office debt of nearly $40,000.
“Effectively the respondents supported their failing business using wages they withheld without employee agreement and tax owing to the community to support community infrastructure such as hospitals and roads,” the judge said. “Ultimately they failed to pay the employees. It is simply unacceptable to continue to trade using employees’ labour when a business is not able to pay wages.”
He said the couple’s health issues were an important consideration but “it is not an adequate explanation for a period of 15 months of effectively exploiting employees”.
Lawyers for the couple told the court that any penalty not within the low range would be “crushing to them” but the judge said ”whether this is true is unclear as they have fled the country to live in Germany”.
Judge Riethmuller said failing to remedy any underpayments prior to the imposition of a penalty must always be a significant aggravating factor.
“The most significant underlying purpose of the statutory scheme is to ensure that workers receive minimum entitlements for their labour,” he said.
“This is crucial for the individuals who are usually the most vulnerable in the community, and for the fabric of Australian society as a whole by ensuring that a culture of exploitation does not grow.
“It is disappointing that the applicant has not yet taken steps to attempt to enforce the judgment for outstanding employee entitlements in Germany.”
Asked to comment on the judgment, the Fair Work Ombudsman told The Australian on Tuesday that “ where a party is no longer in the jurisdiction, the FWO undertakes an assessment of the available options for recovery both within and outside of Australia”.
A FWO spokesman said the assessment was subject to a range of variables, including the availability of funds and jurisdictional considerations.
“The FWO is as yet unable to determine whether the amounts will be able to be recovered in this particular case,” he said.