Endota Day Spa operator slammed for underpayment

By Nick Hall | 23 Jul 2019 View comments

The operator of six Endota Day Spa centres in Sydney has back-paid 13 workers more than $65,000 following an investigation by the Fair Work Ombudsman (FWO).

Chris Barbour, director of Sea One North Pty Ltd, trading as Endota Spa Sydney admitted he made unlawful deductions from workers’ salary and underpaid penalty rates and annual leave entitlements.

The admission follows a lengthy investigation from the FWO that was spurred by requests from workers. Two skilled 457 visa holders contacted the ombudsman alleging the company was making deductions from their pay to cover visa related costs.

The resulting investigation found that between May 2014 and February 2018, the company made unlawful fortnightly deductions from the pay of thirteen 457 visa workers, totally $58.025.

Endota Day Spa unlawful deductions

According to the FWO, Endota Day Spa and Mr Barbour deducted $250 per fortnight from the workers’ pay. Once the worker’s visa sponsorship costs had been met, which was as much $7000 in one case, the deductions ceased.

Barbour promised that the withheld funds would be repaid after workers completed a specified employment term of Endota Day Spa.

Sandra Parker, Fair Work Ombudsman said that while deducting pay from workers’ salary was not illegal, the act must meet the circumstantial requirements and be principally for their benefit.

“Businesses can’t use deductions from workers’ salaries as a bargaining chip to keep them employed in the business,” 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.”

Penalty rate and annual leave underpayment

Additionally, the FWO recovered nearly $8000 in unpaid penalty rates and annual leave entitlements.

Endota Day Spa has since committed to back-paying all workers for the unlawful deductions and underpayments. The FWO also commended the business on its cooperation throughout the investigation process.

The latest investigation follows a string of migrant underpayment concerns identified by the FWO, particularly in franchised businesses.

Parker suggested the FWO would continue its focus on addressing migrant underpayment, with the latest investigation serving as a stern warning.

“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,” Parker said.