Coffee Club franchisee faces Court over alleged 457 fraud

by HCA04 May 2017
A Coffee Club café franchisee in Brisbane allegedly coerced an overseas worker to repay $18,000 of his wages by threatening to cancel his 457 skilled worker visa if he didn’t do so.

The accusations come amid the Turnbull Government's proposed changes to the 457 visas which are common in Australia’s cooking profession.

Saandeep Chokhani and his wife owns and runs the Coffee Club franchise at the Nundah Village Shopping Centre.

In addition to the Coffee Club franchisee, Chokhani and his wife’s company Gaura Nitai is also facing Court.

The Fair Work Ombudsman Natalie James said the agency has a proactive compliance deed in place with the owners of the Coffee Club Franchise, Minor DKL Food Group (MDKL) and commended the company’s cooperation through the course of the investigation.

The underpaid worker is an Indian national in his late 20s who was sponsored by Gaura Nitai to work as a cook at the Coffee Club outlet on a 457 skilled worker visa.

The cook was allegedly promised an annual salary of $53,900 when he was recruited but was paid much less.

Moreover, after failing to pay the worker any wages for a four-month period from July to November in 2014 and a one-month period in February-March 2015, Chokhani and Gaura Nitai paid the worker $19,334 by electronic transfer on 22 April 2015.

Chokhani allegedly then told the worker to withdraw $18,000 in cash and repay it to him or his 457 visa would be cancelled. The worker obeyed Chokhani’s request on the same day he was asked.

However, the worker only lodged a request for assistance with the Fair Work Ombudsman after his employment was terminated without notice in November 2015.

The Fair Work inspectors allegedly found that because of the unlawful cashback payment, the worker had been underpaid his minimum hourly rates, casual loading, annual leave entitlements, overtime rates, payment in lieu of notice of termination and penalty rates for weekend and public holiday work.

The worker was allegedly short-changed a total of $23,546 between September, 2013 and November, 2015.

The FWO Natalie James added they are pleased that in this instance, the franchise owner presented their inspectors with documents to assist the investigation.

"It should be noted that we received these documents without the need to issue a Notice to Produce. MDKL is to be commended for its approach to ensuring compliance in its network,” said James.

The worker has now been back-paid in full. Chokhani faces maximum penalties of up to $10,800 per contravention and Gaura Nitai faces penalties of up to $54,000 per contravention.

The penalty hearing is scheduled for the Federal Circuit Court in Brisbane on 2 June.

Earlier this year, a Court issued record fines of $532,000 against one cafe which coerced 457 visa workers to pay back portions of their wages under threat of violence.

Related stories:

457 visa changes – what you need to know
$72,000 in penalties after employee underpaid, sacked by text message


  • by Sit tight mike 5/05/2017 2:08:12 PM

    Why was he here in a 457 visa? Have we no cooks in Australia?

  • by Bernie Althofer 10/05/2017 1:44:37 PM

    It would appear that there is an increased need for those engaged in operating a business, to ensure that they as business owners or operators know and understand the relevant awards and legislation under which they will operate. Taking proactive measures by researching relevant sites e.g. Fair Work Commission, engaging skilled professionals who can provide appropriate and relevant advice etc may reduce the level of risk exposure. Attendance at an information session may help to point a business owner in the appropriate direction regarding current obligations and requirements.

    Educating workers about entitlements, avenues for remedial action and developing workplace cultures that support individuals who have concerns about payment etc is an important component of being proactive.

    As laws change in relation to 457 Visas, and as the Fair Work Commission develops a more proactive approach to compliance, it is possible that some organisational practices will be identified where improvements are required. As articles such as the one above appear, it should be an encouragement for those involved in various businesses to review current systems and processes.

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