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HR manager among those guilty of $500k scandal

Adam Zuchetti
Adam Zuchetti
17 November 2017 1 minute readShare
Dollar signs

An HR manager is among three individuals at a business found guilty of “systematic” exploitation of workers in a scandal worth more than half a million dollars.

Penalties worth close to $400,000 were handed down to New Shanghai Charlestown restaurant as well as its owner, restaurant manager and HR manager, who were found to have deliberated underpaid 85 employees by a whopping $583,688 – and then tried to cover it up.

One particular employee was underpaid more than $33,000 – the equivalent of almost an entire year’s salary.

“Rogue business owners and managers who think they can run operations based on exploitation of vulnerable workers and then try to hide behind corporate structures or flimsy excuses are playing with fire,” said Acting Fair Work Ombudsman (FWO) Kristen Hannah.

“Where we find blatant exploitative conduct, we will do everything within our power to ensure that all accessories to that conduct are held to account.

“This includes taking action against not only business owners and directors – but also any HR practitioners, accountants, industrial relations specialists and any other professionals involved in knowingly facilitating exploitation of employees.

In handing down his judgment, Justice Robert Bromwich said there had been “serious and premeditated conduct” which “encompassed a widespread, systematic and prolonged failure to accord employees their basic entitlements”.

NSH North, the company operating the restaurant, was fined $301,920, and its owner Zhong Yuan “John” Chen – described as the “mastermind” of the exploitation was personally fined a further $54,672.

More than $450,000 of the underpaid wages have now been paid back, and the company is trying to track down the remaining affected employees.

In a separate twist that will make HR professionals nationwide carefully consider their own actions, HR Manager Ting “Sarah” Zhu was slapped with a $21,760 penalty for her role in the scheme, despite submitting to the court that her culpability was reduced because of “familial and cultural pressures of loyalty” to Mr Chen as the business owner.

The judge rejected this, however, saying that Ms Zhu “acted in her own interests”.

“In no sense was Ms Sarah Zhu a victim of the conduct … Moreover, she took an active role in the attempt to thwart the FWO investigation,” Justice Bromwich said.

HR manager among those guilty of $500k scandal
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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