$15.3 Million in Penalties for Sushi Restaurant Chain and Director for Serious Breaches

A director and CEO of a group of four sushi restaurants, operating across New South Wales, the ACT, and the Northern Territory (Sushi Bay Group), has been hit with a $1.6 million penalty by the Federal Court of Australia for violating the Fair Work Act 2009 (Cth) (FW Act). The total penalties for the group amount to $15.3 million.

This case marks a longstanding issue with the Fair Work Ombudsman (FWO), dating back to 2009, when one of their Queensland restaurants was found underpaying employees. Despite previous warnings, including a 2015 “letter of caution” for underpayment and other breaches, the contraventions continued.

In a recent case, Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 2) [2024] FCA 76, the Court uncovered significant breaches between February 2016 and January 2020. These included underpayment of wages, failure to provide annual leave entitlements, issuing false pay slips, and knowingly misleading the FWO. A total of 163 employees were affected, many of whom were temporary visa holders.

The restaurant chain used a deceptive payroll system that concealed underpayments by paying employees dual rates—legitimate award rates for contracted hours, and below-award rates in cash for additional hours. Workers under 457 visas were also forced to repay part of their earnings to the employer.

In Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869, the Court ordered the group to pay $13.7 million in penalties, with an additional $1.6 million imposed on the director. The Court emphasized that this was a case of deliberate exploitation of immigrant workers and a failed attempt to hide these actions.

Despite prior legal action in 2019, the director continued these practices, with the Court stating she took a “calculated risk” in considering previous penalties as a mere cost of doing business. The penalties were increased to send a strong message that such breaches are “unacceptable and economically irrational.”

Key Lessons for Employers

This case highlights the severe consequences of non-compliance with the FW Act and the growing focus on protecting employee rights. Employers must meet minimum wage and entitlements obligations or face substantial penalties. From January 2025, wage theft will be criminalized, with penalties including imprisonment for individuals found guilty.

This information is for general guidance and not legal advice. Workplace Law accepts no liability for reliance on this blog content. Where applicable, liability is limited under Professional Standards Legislation.