Endota Spa Sydney, a franchisee of the popular chain of day spas, has admitted to making unlawful deductions from employee salaries and underpaying other entitlements, according to the workplace regulator.
The Fair Work Ombudsman (FWO) said in a public statement that Sea One North Pty Ltd, which trades as Endota Spa Sydney, and its director Chris Barbour have backpaid 13 employees a total of $65,939.87, after admitting to making fortnightly deductions from the salaries of the 457 visa holders as a means of covering visa-related costs.
FWO said the deductions amounted to $58,025 and were withheld between May 2014 and February 2018. It said that $250 was deducted each fortnight from the employees’ pay until the costs of sponsorship had been covered — as much as $7,000 each.
“This amount was withheld from the workers and Mr Barbour promised it would be repaid after they completed a specified employment term with Endota Spa Sydney,” the regulator said.
It added that a further $7,914.87 had been underpaid to the same employees by way of penalty rates and annual leave that had not been paid. The full amount has since been repaid.
Affected employees came from various countries, including the UK, Ireland, Japan and Poland.
According to the FWO, Endota Spa Sydney fully co-operated with investigators and has entered into a court-enforceable undertaking, under which it will have all six of its sites audited this year and again in 2020 to ensure employee entitlements are being paid correctly.
It will also be required to give all managers workplace training, and make a $10,000 contribution to the Commonwealth government’s Consolidated Revenue Fund — the same fund to which Masterchef judge George Calombaris’ group MAdE Entertainment were last week ordered to pay $200,000 after underpaying its workforce by $7.8 million.
Endota Spa Sydney is a franchisee of Endota Spa, and operates six Endota-branded centres across Sydney, including at the Four Seasons hotel and Martin Place in the CBD, the FWO noted. Its other centres are located in the suburbs of Chatswood, Crows Nest, Paddington and Rozelle.
According to its website, Endota Spa has a franchise network of more than 100 centres nationwide, having launched in 2000.
The company — and through it, Mr Barbour — were approached for comment on the matter.
Visas ‘not a bargaining chip’, employers warned
There are only a strict few instances in which employers can legally deduct amounts from employee pay, ombudsman Sandra Parker warned, which must be principally for the workers’ own benefit.
“Businesses can’t use deductions from workers’ salaries as a bargaining chip to keep them employed in the business,” Ms Parker said.
“Endota Spa and Mr Barbour have acknowledged their conduct breached the law, and we will keep a close eye on their conduct moving forward to ensure they’re meeting their obligations under workplace laws.”
She added: “This significant back payment bill should also serve as a warning to all employers that it is not acceptable to underpay migrant workers, or make unlawful deductions. Employers who do this will get caught.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.