Written by Workforce editor David Marin-Guzman.
Malaysian restaurant chain and so-called ‘Sydney institution’ Mamak is facing court action following claims it underpaid its foreign workers more than $87k, with its owners allegedly concealing the underpayments by providing false records to the workplace ombudsman.
The Fair Work Ombudsman’s action filed late last year comes as the restaurant’s owners have expanded their operation into Melbourne and recently opened up a sister-chain called Hawker.
Mamak located in Chinatown is often listed as one of Sydney’s “most affordable restaurants”, and attracts lines around the block for its “authentic” Malaysian street food.
The FWO statement of claim reveals that six Mamak casuals – most on student visas – were allegedly underpaid $87,349 between February 2012 and April 2015.
Staffers worked past midnight but were paid as little as $11 an hour without penalty rates or casual loading. One employee was allegedly underpaid $26,793 and another $21,538.
The FWO is also accusing the restaurant and its owner-operators of providing it with false records that made it appear that it had paid higher rates than was actually the case.
Although Mamak eventually reimbursed the workers following the FWO action, the ombudsman is seeking penalties from the restaurant and the owners – Joon Hoe Lee, Julian Lee and Alan Wing-Keung Au – for being “knowingly involved” in the underpayments.
They face maximum penalties of up to $10,200 per breach, and Mamak itself up for $51k per breach, plus penalties for allegedly creating or authorising the false pay records.
The FWO is also seeking an injunction restraining the owners – who have Mamak restaurants in Chatswood, Sydney, and the Melbourne CBD – from breaching workplace laws in the future.
The owners would have to undertake training in workplace relations law and commission an audit of their compliance.
Student council organising foreign workers
One of the underpaid Mamak workers, Vicky (not her real name), spoke to Workforce Daily on condition of anonymity.
Vicky was on a student visa while employed at Mamak and was paid $11 an hour, later upped to $13.50 an hour when she should have been paid more than $22 an hour. However, she said initially she did not know she was being underpaid.
It was only after speaking to fellow students at a conference hosted by the Council of International Students Australia (CISA) in July last year that Vicky became aware of what her rights were.
“I didn’t really dare to speak up at that time because I had built up a rapport with my employers … and people would come up to me to say don’t bring this to authorities, keep quiet about it,” she said. “I think that was because most of the students are working more than 40 hours a fortnight and that’s against their visa.”
But when the owners rostered her at the newly-opened Hawker, Vicky said she was forced to deal with demanding customers until 3am which was “really hard on me”.
“I thought it was really unfair that I got paid so little to do so much.”
When she talked to another dissatisfied co-worker about it, the two started organising their colleagues to make a complaint to FWO. While some workers chose not to get involved because they were worried they would get in trouble, others “were really brave about it”.
“It just became like a chain reaction. We ended up getting six of us to make a complaint.”
Vicky said she pushed forward with the complaint instead of settling, saying she wanted to have an impact.
“I felt Fair Work really ought to know what’s going on in there and I really wanted the investigation to go on. I didn’t want it to just be for the money.”
Mamak avoided scrutiny through false records
Vicky says Mamak provided staff with payslips that would record what they were paid and their hours but without any company names or ABN.
Meanwhile, Mamak presented different pay records to the authorities when it was audited.
As part of the FWO’s national hospitality campaign in August 2013, Mamak provided the ombudsman with payroll advices and roster reports, including for one of the allegedly underpaid workers in the FWO’s current action.
Those pay records said the worker was paid an annual salary of $38,808, superannuation, a casual weekday hourly rate of $24.54 an hour along with PAYG income tax deductions.
The FWO now says in reality that worker was only paid a flat hourly rate of $14.14.
The agency claims Mamak knowingly provided it with false and misleading records.
Mamak did not return requests for comment before presstime.
Unlawful pay rates spread like ‘disease’: CISA
How Mamak allegedly came up with its pay rates reflects a common refrain in underpayment cases involving employers from non-English backgrounds.
Vicky told Workforce that a Mamak manager told her she was paid $11 an hour because “every other restaurant around us is paying that rate – why should we pay you any more”. The manager allegedly said “the reason they came up with $11 an hour was because [they] sussed out, asked what the restaurants around them were paying”.
Other underpaying employers have given similar reasons. Last year, a Korean cleaning business owner in Qld said he paid overseas backpackers just $14 an hour after talking to other Korean businesses about their pay rates.
An underpaying Sydney sushi bar operator told the FWO she paid her staff a “market rate” after doing a ring around of her competitors to find out what they were paying.
And in July last year, a Korean BBQ chain owner said he had advertised for staff at $12 an hour because it was “normal” at Korean restaurants in Sydney and because he feared retribution from competitors if he offered award wages.
CISA president Nina Khairina told Workforce underpayments of foreign workers in hospitality were “too common, almost normalised”.
“One restaurant will influence the pay of the next restaurant and it just keeps going,” she said. “It’s a disease.”
She warned “if these underpayments are so widespread it doesn’t just affect international workers, it affects locals as well”.
Foreign workers start to fight back
But the Mamak case also represents a growing instance of foreign workers organising themselves to combat underpayments, with the assistance of groups like CISA to address cultural and language barriers.
The student council first became involved in underpayment cases under former president Thomson Ch’ng in 2013 when it assisted Sydney worker Wan and his colleagues to make an underpayment complaint against global Malaysian restaurant chain Pappa Rich.
Wan alleged that Pappa Rich Broadway paid him just $13 an hour, but recorded his pay as $18 an hour when he requested a payslip.
At the time, Pappa Rich Broadway said “it takes any matters involving our employees very seriously, and we are committed to remunerating our staff in line with what is fair and legal, while providing a safe and happy workplace”.
Pappa Rich Broadway eventually settled the underpayment claims through the FWO and is understood to have increased their rates since.
Vicky said she was encouraged to make her complaint after talking to Wan.
“It made me feel that someone who had gone through this before – it’s not going to be futile,” Vicky said.
Khairina said “what we can envision is more and more people coming forward”.
“People will follow if they know what to do and are guaranteed protection.”
Khairina said overseas workers constituted a significant amount of the Australian workforce but had minimal advocacy.
While unions had given assistance to CISA, overseas workers were often unaware of unions or did not join them due to language or cultural differences and the transitory nature of their visas.
“An independent foreign worker union equivalent needs to be set up,” Khairina said.
(This story first ran in Workforce Daily, January 19, 2016)
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