Hospitality worker wins unfair dismissal case after ATO underpayment tip-off

A hospitality worker has won an unfair dismissal case after an ATO letter tipped him off that he was being underpaid.

On 11 February 2025, hospitality worker Jian Zhang was sent a letter from the ATO, saying that there had been a discrepancy between his reported wages and what his employer had declared.

Zhang soon realised he had been underpaid between July 2023 and July 2024 after reviewing his own records, court documents alleged.

He raised his underpayment concerns with his employer, Yunpeng Guan. Soon after, on 22 February, Guan dismissed Zhang on the spot, without any prior warning or written notice.

Zhang had worked at the venue, Benowa Highland Court Chinese Restaurant, for six years before his dismissal. The company had been sold to Guan in February 2023.

On 10 March 2025, Zhang went to the Fair Work Commission, alleging that he had been unfairly dismissed.

He alleged that Guan had initially claimed his dismissal had been due to “economic reasons,” but later claimed it had been due to “misconduct,” although no evidence was provided of such misconduct, court documents said.

The FWC found that Guan did not have a valid reason for the dismissal, and inferred that it had been directly linked to Zhang’s decision to raise concerns regarding his underpayment.

“The only evidence before me is that of the Applicant’s, and that evidence is that the Applicant was dismissed without warning and not long after having raised a concern that he had been underpaid,” court documents read.

“This leads to a clear inference that his dismissal was related to his having raised the issue of alleged underpayment.”

The FWC concluded that Zhang’s dismissal had been “harsh, unjust and unreasonable and therefore unfair,” court documents showed.

The commission estimated that the wages that Zhang would have earned during the 22 weeks between his dismissal and the FWC hearing equated to $7,953.

As such, the FWC ordered Guan to compensate Zhang the $7,953 plus 11.5 per cent superannuation contributions.

The case comes as a survey from the University of Melbourne’s Fair Day’s Work project revealed rife underpayment and employee exploitation for young workers.

The project, which surveyed 2,814 workers under 30, found that 33 per cent were paid $15 per hour or less, 24 per cent had not received compulsory super entitlements, while 43 per cent had been told to complete extra work without additional pay.

The accommodation and food services industry was one of the worst offenders, the survey revealed. Many workers in small businesses were not paid overtime or penalty rates, and were paid ‘off the books’.

The researchers identified that many workers were reluctant to seek help from regulators, such as the FWC and Fair Work Ombudsman.

Of those who had sought any help regarding a pay issue, only 20.7 per cent went to the FWC, while 20.8 per cent went to the FWO.

However, workers who had dealt with the ombudsman had largely viewed their experiences as positive – 41 per cent found the FWO to be “very helpful” while only 16.7 per cent had described them as unhelpful.

The report recommended more funding to be dedicated to raising awareness among vulnerable workers that help was available from regulators such as the FWC and FWO, to help curb the exploitation rife throughout many Australian industries.