Sushi Bay companies fined millions for exploiting workers, including in ACT

A total of $15.3 million in fines have been handed out after sushi restaurant companies were found to have exploited workers at outlets across Australia, including in Canberra.

“This is yet another case of the exploitation of immigrant workers and a shameless but ultimately unsuccessful attempt to conceal it,” the Federal Court’s Justice Anna Katzmann said in Monday’s decision (5 August).

She said Sydney woman Yi Jeong ‘Rebecca’ Shin was the CEO and sole director of four companies, now in liquidation, which were members of the Sushi Bay Group.

This group was under Ms Shin’s control and operated sushi restaurants in the ACT, NSW and the Northern Territory.

The four companies underpaid 163 employees a total of $653,129 between 2016 and 2020, with individual employees suffering losses ranging from $47 to over $83,000.

As part of this total, Sushi Bay ACT underpaid 15 of its workers $13,163 over three months.

Justice Katzmann described the companies’ conduct as “both calculated and audacious” and said it was evident they “knew that their conduct was unlawful”.

Certain employees were paid according to what was termed a “Dual Rate Method”, but the judge said this method was “obviously devised to avoid paying award rates for all the work performed by the employees, while at the same time giving the appearance of compliance”.

She agreed with the Fair Work Ombudsman, who said all the affected employees were highly vulnerable to exploitation as 85 per cent held temporary visas and 52 per cent were under 25.

Sushi Bay ACT was fined $5.8 million, Sushi Bay $3.2 million, Auskoja $2.4 million and Auskobay $2.3 million. Ms Shin was fined $1.6 million, which was to be used to repay the employees.

Justice Katzmann found Ms Shin’s four companies contravened numerous provisions of the Fair Work Act 2009 and Fair Work Regulations 2009, including failing to pay minimum award rates, casual loadings, annual leave loadings, overtime rates, as well as weekend and public holiday penalty rates.

Also, she found the companies made false or misleading records, gave false or misleading records to a Fair Work inspector, required employees to return part of their wages and failed to pay some annual leave entitlements.

Justice Katzmann said the Sushi Bay Group operated sushi restaurants in 16 locations across Australia, but the most recent liquidator’s report found that Sushi Bay ACT, Auskobay and Auskoja did not have any assets, while the estimated realisable value of Sushi Bay’s assets was $152,872. They also had almost $5.5 million in liabilities between them.

“As the ombudsman acknowledged, it is unlikely that the entities will pay any penalties imposed upon them,” the judge said.

Ms Shin told the court she was born in South Korea in 1961 and came to Australia in 1989. She claimed she had no capacity to pay a substantial penalty and was likely to go bankrupt, but Justice Katzmann said, “Ms Shin has a history of dishonesty”.

“Ms Shin was the only person who had final authority to make decisions about the operations, policies and practices that were applied across the Sushi Bay Group,” she said.

She also said there was no evidence to suggest that any corrective action was taken, and the employees remained unpaid.

The total penalties are the highest-ever secured in a Fair Work Ombudsman legal action.

An ombudsman spokesperson said Ms Shin and Sushi Bay ACT had already been penalised a total of $124,416 in 2019 for underpaying workers in Belconnen, many of whom were migrants.

They also said that all of the Sushi Bay outlets, bar one, had closed and that Justice Katzmann had recommended that Ms Shin be referred to the Australian Taxation Office, the Department of Home Affairs, and the Australian Securities and Investments Commission.

“The record penalties imposed in this matter drive home the fact that deliberately and repeatedly exploiting workers, including vulnerable migrant workers, is reprehensible conduct that will not be tolerated in Australia,” Fair Work Ombudsman Anna Booth said.

“We treat cases involving underpayment of migrant workers particularly seriously because we are conscious that they can be vulnerable due to factors such as a lack of awareness of their entitlements or a reluctance to complain.”