Largest fine imposed on Australian employer for exploiting 457 workers

Minister for Immigration and Border Protection v Choong Enterprises Pty Ltd (No 2) [2015] FCA 553

The poor treatment and exploitation of employees on 457 visas has received much media scrutiny of late. A recent decision of the Federal Court has emphasised the serious manner in which the courts regard such poor treatment.

The employer, Choong Enterprises operated a number of cafes and restaurants in Darwin and sponsored 10 employees from the Philippines as chefs, cooks and restaurant managers. Choong paid each worker between $12 and $13 per hour and only increased it by $1 per hour over a span of four years, significantly less than the required award rate of $25 per hour. No overtime was paid despite employees working 60-hour a week shifts during the dry season.

Some employees were forced to work in unskilled positions different to the type of work they were approved to perform in Australia. Choong also sought to recover the costs associated with obtaining the visas, such as lawyers’ and visa fees from its workers. Choong only underpaid its Filipino workers. Others were paid above the award rate. Choong paid its Filipino workers in cash and had no records of the amounts paid, superannuation contributions and tax withheld. They had no adequate leave records and had not been advising the Department of Immigration when employees ceased employment.

For all of the above, a fine of $175,400 was imposed for breaches of their sponsorship obligations. Choong was also ordered to reimburse its employees $125,956 and pay $26,460 as PAYG tax to the Commonwealth.

This case is a reminder to Australian employers that besides ensuring employees are paid at the agreed rate, all employment records (payslips, PAYG, super contributions) must be made available when requested by the relevant inspectors. Also, 457 employers are reminded that when they terminate the services of their 457 employees, the Department of Immigration must be notified of this within 30 business days. Employers must be aware that 457 employees who elect to take unpaid leave or extended periods of leave may be in breach of the terms of the approval and should consult with migration advisors to determine whether the arrangement is aligned with their sponsorship obligations.


Mark Dunphy

Mark is an employment lawyer experienced in litigious and non-litigious applications of employment and industrial relations law.

Kristopher Kunasingam

Kristopher leads the firm's migration practice. He specialises in employment-related migration to Australia.

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