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The Cheesecake Shop Underpayment

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By Renee Karakinos, Lawyer, MST Lawyers

In a recent case, the Federal Court of Australia determined that Mr Jameel Ahmed, a pastry chef on a temporary class 457 visa, was significantly underpaid throughout his employment with Al-Hussain Pty Ltd t/as The Cheesecake Shop.  The Cheesecake Shop franchisee has been ordered to pay Mr Ahmed, approximately $250,000, which is one of the most significant payout decisions under the Fair Work Act 2009 (Cth) (Act).

Mr Ahmed moved to Australia on a temporary class 457 visa in February 2014 and commenced employment as a pastry chef with Al-Hussain Pty Ltd. His position was terminated on 26 November 2017.

Mr Ahmed claimed that during his employment he was significantly underpaid and that he was pressured into paying $700 per fortnight to his employer, under the threat of losing employment and even possible deportation due to the restrictions of his temporary class 457 visa.

During his time at the Cheesecake Shop, Mr Ahmed’s wages were paid inconsistently, irregularly and sometimes not at all. Despite constant attempts to remind his employer to pay him correctly, Mr Ahmed was ignored and often threatened that if he did not stop demanding his wages, his sponsorship through the temporary class 457 visa and his employment with Al-Hussain Pty Ltd would be terminated.

Justice Rares found that Al-Hussain Pty Ltd breached section 323 of the Act on multiple occasions by “not paying him amounts in full in relation to the performance of work” and section 325 of the Act through “unreasonably requiring Mr Ahmed to pay, as cashback payments, to the employer.”

Justice Rares ordered:

  • Al-Hussain Pty Ltd and Mr Zahid Hussain (the owner and operator of the business) to pay Mr Ahmed $111,102.29 in lost wages;
  • Al-Hussain Pty Ltd to pay pecuniary penalties totalling $100,000 to Mr Ahmed;
  • Mr Zahid Hussain to further pay pecuniary penalties totalling $20,000 to Mr Ahmed;
  • Mr Saqib Bhatti (the owner and operator of the business) to pay Mr Ahmed $12,103.35 in lost wages; and
  • Mr Saqib Bhatti to pay pecuniary penalties totalling $6,000 to Mr Ahmed.

If you have any questions about your employment law obligations or about the above mentioned Federal Court decision, please contact the MST Lawyers Employment Law team by email or call +61 3 8540 0200 to speak with a specialist employment lawyer.