2LT Local News

Hydro Majestic, Lilianfels being investigated over pay conditions

Jul 7, 2019

SYDNEY, New South Wales, Australia – A number of prominent boutique, luxury, hotels in the Blue Mountains of New South Wales, Australia are under investigation by the Australian Department of Home Affairs and the Fair Work Ombudsman over their treatment of expat workers employed at the establishments.

Among the hotels being investigated are the iconic Hydro Majestic in Medlow Bath, the Lilianfels Resort & Spa in Katoomba, the Echoes Boutique Hotel in Katoomba, and the Parklands Country Garden and Lodges in Blackheath, all located in the World Heritage-listed Greater Blue Mountains area, just west of Sydney.

According to The Sun-Herald, which has conducted a 14-month investigation into practices engaged in by the hotels, workers from overseas are being employed and while they are paid award wages, they are being charged more than half of what they earn for shared-accommodation and meals, which are not always provided.

Employees on 407 Training Visas, some engaged as Interns, are allegedly charged $480 a week for a shared-room, whereas for a little more they could rent an entire house anywhere in Katoomba or Blackheath. Employees do not have the option of arranging their own accommodation.

The Sun-Herald article, penned by Anna Patty, the Workplace Editor for The Sydney Morning Herald and a former Education Editor, State Political Reporter and Health Reporter, alleges employees are also not paid for up to three hours of overtime they work each day.

The expats who worked at the hotels say these conditions made them feel like “prisoners.” Most workers interviewed by The Sun-Herald said they did not want to be identified because they feared reprisals. “For me I am in a first world country working in third world conditions,” one said.

The Sun-Herald investigation found 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 told the newspaper it denied “underpaying or exploiting” any of its employees or interns, including those on 407 visas. The group, which also has a hotel in the Hunter Valley, confirmed that investigations are being undertaken 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.”

Professor Allan Fels who chaired the Migrant Workers’ Taskforce which released its findings in March this year, 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 says it interviewed 9 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 told the newspaper, they were paid properly but were concerned their co-workers on training visas were being underpaid, and forced to live in overpriced accommodation.

The Sun-Herald says it 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, the newspaper article says.

After the rent is taken out of their wages, the interns are left with a net salary of about $16,000 plus $5,000 in superannuation – about $300 in their pocket each week.

The Fair Work Ombudsman was contacted by The Sun-Herald in March, according to Patty’s article, however it was not responsive despite reports Escarpment employees had filed complaints. Last month when contacted again, the Fair Work Ombudsman confirmed an investigation was in process and the employment records of the hotels concerned had been audited. The agency refused to comment further because of the ongoing investigation.

The Sun-Herald article reveals that two workers contacted the Fair Work Ombudsman but were told they should contact Legal Aid. When they contacted Legal Aid they were provided forms which when completed they were told to submit to the Ombudsman.

The Fels report said the Fair Work Ombudsman needed to have a stronger profile with migrant workers and a “stronger enforcement response.”

That conclusion was in all likelihood drawn from the astounding extent to which the task force concluded the practice of underpayment is occurring. “Our attention has mainly been on the employment experience of temporary migrants who have work rights under international student and working holiday maker (backpacker) visas since in large part these appeared to be the areas where the problem was the greatest. Despite the gaps in evidence, we have sufficient understanding to conclude that the problem of wage underpayment is widespread and has become more entrenched over time. The most comprehensive academic survey to date on the issue suggests as many as 50 per cent of temporary migrant workers may be being underpaid in their employment,” the report said.

“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,” Fels told The Sun-Herald.

(Pictured: The Hydro Majestic Hotel).