The Department of Home Affairs and the Fair Work Ombudsman are investigating a luxury Blue Mountains hotel group after a Sun-Herald investigation found it is clawing back wages from migrant workers through overpriced accommodation and unpaid overtime.
The Escarpment Group owns Lilianfels and Echoes in Katoomba, the Hydro Majestic in Medlow Bath, the Parklands Country Garden and Lodges in Blackheath and the Convent Hunter Valley. The Fair Work Ombudsman (FWO) raided the group’s operations in Katoomba and the Hunter Valley last month.
A 14-month Sun-Herald investigation has found the Escarpment Group forces workers on 407 Training Visas to return $480 out of their wages each week to their employer for a shared bedroom and meals that are not always provided. Employees are also not paid for up to three hours of overtime they work each day.
The migrant staff who worked at the group’s properties said these conditions made them feel like “prisoners”. Most workers interviewed by The Sun-Herald did not want to be identified because they feared reprisals. One said: “For me I am in a first world country working in third world [conditions].”
The Sun-Herald investigation found the compulsory room and board charge is automatically deducted from staff wages and is $60 more than the workers would pay to rent an entire house in the same Katoomba/Blackheath area. The so-called interns are also asked to sign time sheets that record 38 hours of work a week instead of the up to 50 hours they actually work. The 12 hours of unpaid overtime are recorded on a second set of handwritten time sheets and rosters.
The Escarpment Group denied “underpaying or exploiting” any of its employees or interns, including those on 407 visas. It said it was being investigated by the Department of Home Affairs and Fair Work.
“Escarpment Group is co-operating with that investigation and believes that it has acted in accordance with the applicable industrial laws,” a company statement said. “The investigation is continuing, therefore it would be inappropriate to make any further comment at this time.”
The Fair Work Ombudsman (FWO) also refused to comment on its ongoing investigation. The Department of Home Affairs referred inquiries to Australian Border Force, which said it could not comment as the matter was part of an ongoing investigation.
However, a Home Affairs spokesperson said 407 visa holders have the same rights under workplace law as Australian citizens and it “takes any allegations of misuse of a visa or exploitation of a visa holder seriously”.
Professor Allan Fels who chaired the Migrant Workers’ Taskforce, which reported to the Morrison government in February, said The Sun-Herald investigation revealed the practice of underpayment “is still pervasive”. He said the government had adopted all his recommendations including jail sentences for serious wage theft, but “speedy implementation” was now needed.
Professor Fels said the hotel group’s conduct was “an important example” that showed exploitation was not confined to foreign students and working holidaymakers who were the subjects of his inquiry.
“It covers other categories of temporary migrant workers,” he said. “It looks to be highly exploitative, highly calculated and a deliberate attempt to break the law.”
The Sun-Herald interviewed nine Escarpment Group hotel workers in Katoomba and examined the employment records of seven on the 407 Training Visa including copies of their pay slips and time sheets which recorded 7.3 hours of paid work per day and 38 hours a week. Signed handwritten time sheets and rosters showed they worked up to 11 hours a day.
Australian citizens who worked at the hotel said they were paid properly but were concerned their co-workers on training visas being underpaid and forced to live in overpriced accommodation.
Payslips The Sun-Herald has seen record 76 hours of work per fortnight and do not record the automatic $960 fortnightly deduction for rent. This charge only shows up on their bank statements. Pay slips from last year show the $960 deduction.
After the rent is taken out of their wages, the interns are left with a net salary of about $16,000 plus $5000 in superannuation – about $300 in their pocket each week.
Employment lawyer Sharmilla Bargon from the Redfern Legal Centre said employers have a legal obligation to keep accurate time sheets and wage records, and payslips that reflect the total number of hours worked. She said an employer should not generally take money out of an employee’s wages, but if they did, the amount “should absolutely be recorded on the employee’s payslip”.
“If this amount isn’t recorded, the employer may have contravened employment laws,” she said.
The Sun-Herald first contacted FWO about the Escarpment Group of hotels in March alerting it to allegations that visa workers were forced to live in overpriced accommodation, but it had nothing to report. Then, last month, it confirmed it was investigating the group and had audited its hotels in Katoomba and the Hunter Valley. It refused to comment further on the investigation.
The Sun-Herald can reveal the FWO has been contacted by at least two of the hotel workers who have evidence of pay slips, rosters, bank records and two sets of time sheets, one with correct times and the other with false times. The workers said they were told to call Legal Aid instead. Legal Aid then provided forms to send to the Fair Work Ombudsman.
“Their advice wasn’t very helpful and they did not understand our situation. That was very disappointing,” one said.
The Fels report noted the FWO needed to have a stronger profile with migrant workers and a “stronger enforcement response”.
While Australian workers might experience underpayment, Professor Fels said they “are not typically exploited over accommodation”.
“The foreign worker coming here is much more exploitable because of their lack of personal supports, their non-access to accommodation, their poor knowledge of the law, the unlikelihood they will report the offender for fear of losing their working rights,” he said.