The Federal Court recently ruled that popular dumpling chain, Din Tai Fung, and its senior management knowingly underpaid their workers and falsified wage records to cover up the underpayments. The company’s Sydney and Melbourne outlets were found to have shortchanged at least 17 workers a total of $157,025 between 2014 and 2018 by not paying minimum rates, casual loadings, weekend penalties, public holiday penalties, evening penalties, or overtime.
The court found that Din Tai Fung had two sets of wage records, one fake and one real, and paid workers in cash for extra hours that were not recorded. A payroll staffer would carry $200,000 in cash in a backpack from restaurant to restaurant every two weeks. Justice Anna Katzmann noted that the payroll staff were complicit in creating false records and assisting in the contraventions.
The court’s decision exposes Din Tai Fung to fines of up to $630,000 per breach, and any individual accessories could face up to $12,600 per breach. However, the company’s original corporate entities have since gone into liquidation, and their assets have been transferred to another entity run by a former director of the company who has not been accused of wrongdoing.
Former Din Tai Fung owner, Dendy Harjanto, who left the country six months before the Fair Work Ombudsman launched legal action, was found to have known about the underpayments and fake wage records. However, the Fair Work Ombudsman could not find Mr Harjanto overseas to serve him, and the case against him was discontinued. Instead, the Fair Work Ombudsman continued to allege that Mr Harjanto’s second-in-charge, general manager Hanna Handoko, and HR coordinator Sinthiana Parmenas were involved in the underpayments and knew the wage records were false or misleading.
Justice Katzmann found that Ms Handoko was the “link in the chain” between Ms Parmenas and Mr Harjanto and that they assisted in bringing about the contraventions and were knowingly concerned in or party to those contraventions. The parties involved will now make submissions on penalties.
