Source : THE AGE NEWS
Blue Sky Kids Land promised “exceptional care” to its tiny customers and their parents, ornamenting them in flower girl dresses, intricate christening gowns and miniature three-piece suits “to make them the star” at its shops across Sydney, Newcastle and Canberra.
But the kid’s clothing store also systematically exploited its staff, paying them as little as $10 an hour, while blocking Fair Work inspectors from entering their stores, threatening to fire those who spoke to regulators and ordering the mass deletion of time sheets, so the abuse of workers rights could not be revealed.
Blue Sky Kid Lands store in Parramatta.Credit: Edwina Pickles
On Friday, as the Christmas shopping rush entered its final stretch, Blue Sky’s cute facade of fairy dresses and pink bows came crashing down.
The company and its two directors, Guo Dong Gu, and his wife, Fei Rong Yang, were fined more than $5.1 million for exploiting four Chinese migrants and obstructing Fair Work inspectors.
The penalty is the third highest ever secured by the Fair Work Ombudsman, following the $15.3 million verdict against sushi chain Sushi Bay for migrant exploitation in August, and a $10.3 million fine levelled against the Commonwealth Bank for staff underpayment in February.
The court found four workers, Xibing Cen, Xing Yang, Tzu Fong Yu and Jin Zhang were underpaid by Blue Sky by between $43,900 and $14,700, with hourly rates half that of the national minimum wage, and total underpayment accounting for up to 60 per cent of what they were entitled to.
Fair Work Ombudsman Anna Booth said there was no reason to think Blue Sky’s exploitation was confined to only those employees, describing their treatment as “horrendous”.
“These substantial penalties highlight that exploiting vulnerable migrant workers is particularly reprehensible conduct that will not be tolerated in Australia,” Booth said.
Giving evidence, the workers said their relationships suffered as they struggled to pay their mortgage, could not afford to take any holidays and were not paid annual leave or superannuation.
When Zhang raised concerns with a Fair Work inspector, Gu threatened to dismiss her for cooperating with the regulator. Then he lied to inspectors about the ownership of a Canberra store and ordered it to close, so Fair Work could not speak to employees.
The conduct of Gu and Yang was worsened by their flouting of employment laws despite years of warnings from Fair Work.
Both business owners were also fined. Credit: Edwina Pickles
Justice Anna Katzmann said in her judgment there was no contrition and minimal corrective action by Blue Sky. Neither Gu nor Yang appeared at the hearings.
“The respondents’ contraventions were many and varied. The nature of them is apparent from the declarations. They took place over a number of years. All of them were deliberate and all were serious,” she said.
“What is more, the contraventions occurred in circumstances in which the respondents either knew or were wilfully blind to their legal obligations.”
In 2021, after Fair Work had already commenced legal action against the company, another shop assistant Kristen Ball lodged a complaint with Fair Work that Blue Sky was failing to pay the minimum hourly rate, penalty rates and annual leave.
“This evidence suggests that, even while this proceeding was on foot, Mr Gu and Fei Yang were continuing to underpay staff,” Katzmann said.
Gu and Yang’s Blue Sky Kids Land Pty Ltd has since gone into liquidation, making it challenging for the regulator to recover the $4.2 million fine. But a new business Starrays Tex Pty Ltd is continuing to trade under the Blue Sky Kids Land brand with Gu and Yang as employees. Neither is a director of Starrays.
Gu, 63, also known as Nathan Gu and Yang, 61, also known as Fay Yang, were contacted for comment through Blue Sky.
Katzmann personally fined Gu $760,000 and Yang $43,000 for their roles in the business.
“Both were directors of the company, playing an active role in its management and operations and Fei Yang is as culpable as her husband for the contraventions in which they are both taken to have engaged,” she said.
Katzmann said the fines would “send a strong signal to the community that this kind of conduct is not an acceptable model for operating a business”.
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