Din Tai Fung fined $4m for ‘calculated scheme to rob employees’

“It involved a calculated scheme to rob employees of their hard-earned wages and deceive the authorities, by which I mean at least the [Fair Work] Ombudsman, the Department of Home Affairs and the Australian Taxation Office,” she said.

“It continued unabated after the passage of the 2017 amendments and while the Ombudsman’s investigation was under way.”

Fair Work Ombudsman Anna Booth said the penalties were the second-highest secured in FWO’s history and showed the serious nature of Din Tai Fung’s offences.

“Their actions resulted in vulnerable migrant workers being underpaid hundreds of thousands of dollars,” she said.

While only the pay of 17 workers was examined, Justice Katzmann said it was likely they were representative of the broader workforce that totalled 407 employees in 2018.

The workers were underpaid minimum rates from 2014 to 2018 and the overwhelming majority were migrants under 30 years old, with 90 per cent on temporary visas.

Individual underpayments ranged from $2300 to more than $50,000. The employees were never compensated.

The court heard evidence that Din Tai Fung deliberately hired visa holders rather than Australian citizens or permanent residents so as to avoid their business practices coming to the attention of authorities.

It would keep two sets of wage and hours records, one real and one fake. The chain would then pay workers in cash for extra hours not on the books, with a payroll staffer lugging a backpack filled with $200,000 from restaurant to restaurant every fortnight.

The HR co-ordinator and general manager failed to give any written or oral evidence on the underpayments or show any contrition.

Instead, they submitted a wages audit conducted by Hospitality Legal – on instructions from Ms Handoko – over a two-week period in 2019 to argue the company had taken steps to ensure wage compliance.

However, Justice Katzmann found it “does nothing of the sort”. The audit only covered eight low-level casuals at one restaurant, did not identify any authors, did not disclose Din Tai Fung’s instructions or attach, aside from one payslip, any documents it relied on.

She said it was likely Din Tai Fung did not advise Hospitality Legal it had a long-standing practice of creating fake records and “for all I know that practice continued at the time of the audit and Hospitality Legal was oblivious to it”.

She found Ms Handoko and Ms Parmenas were involved in some of the serious contraventions, including setting the unlawful pay rates and facilitating the fake records.

The judge rejected their lawyer’s claims that Ms Parmenas would have to sell a share of her home to pay her fine and rejected evidence that both managers earned just $49,000 and $70,000 in 2018 respectively – which was less pay than a cook.

“The inference that they were also paid partly in cash is inescapable,” the judge said.

Meanwhile, she noted the two companies responsible for the underpayments sold their business in 2020, while the FWO’s investigation was still in progress, to two other companies that were registered on the same day.

One of the new entities, Austap, traded under Din Tai Fung and operated restaurants under its name while continuing to sponsor skilled visa workers.

Ms Handoko acted as director of both new entities until 2020, when she was replaced by a former Din Tai Fung director, and employees’ contracts showed Ms Parmenas continued to the do the same HR work for the new Din Tai Fung entities.

Justice Katzmann said she inferred that both Ms Parmenas and Ms Handoko still held roles in the new companies, given they had provided no evidence to the contrary.