Kajal Limbachiya says she would sometimes sleep on the couch at the Indian restaurant where she worked when she had insufficient breaks between her shifts.

At the start of 2020, the then-24-year-old international student from India was unaware she was about to face the toughest time of her life.

“But I survived,” Ms Limbachiya said.

Former students’ fight for unpaid wages highlights loophole in Australia’s legal system
Kajal Limbachiya is owed nearly $15,000 in unpaid wages and entitlements.(Supplied)

For $10 an hour she worked day and night shifts, doing a range of tasks including cooking, waitressing, and other odd jobs.

When she finished at 4am and had to work again at 10:30am, she said she slept at the restaurant in Melbourne because it wasn’t worth going home.

Ms Limbachiya was also struggling financially because her employer wasn’t paying her properly — she was owed nearly $15,000 in wages and superannuation when the pandemic hit in March.

The lockdown also meant she couldn’t easily switch jobs.

Ms Limbachiya said she couldn’t afford food, rent or university fees and spiralled into depression.

“If he gave me that money, I would not have suffered this much,” she said.

Two years on, the 26-year-old still has not been paid, despite a court ordering her employer to pay her what she is owed. 

Ms Limbachiya’s experience shows how the legal system makes it hard for vulnerable workers to get back “small claims” — unpaid wages and entitlements up to $20,000.

“At the moment there must be so many court orders that have been made in this space, small claims applications relating to unpaid employment entitlements, that have just been Pyrrhic victories,” her lawyer Gabrielle Marchetti said.

A “Pyrrhic victory” is an empty victory, where the winner loses more in total than what they gain.

How these students found help

A woman wearing a jacket stands in a park and looks at the camera smiling.
Vaishnavi Lella says students should speak out against dishonest employers. (ABC News: Sally Brooks)

Vaishnavi Lella and Vineeth Kuddigana also worked at the Indian restaurant in early 2020 and were underpaid.

Like Ms Limbachiya, Ms Lella had verbally agreed to be paid $10 per hour, less than the minimum wage, because it was hard to find work at the time.

Ms Lella said after two weeks she had not received the total amount of pay she was owed, so asked her boss for the outstanding amount.

She said he replied with: “How much do you need?” 

Ms Lella left the job after about one month and started looking for help to recover the $3,200 in wages and super she was owed.

She contacted the international student representative at Swinburne University, where she was studying a master’s degree in construction management.

They put her in contact with employment legal rights service JobWatch.

“There are international student mentors in all the universities,” Ms Lella said.

“They [can act] like a bridge … to introduce you to a lawyer or to a community service legal centre,” she said, adding it was a free service.

A man in graduation outfit.
Universities can link students with worker rights support services.(ABC News: Brendan Esposito)

In court proceedings, OzeeOze Pty Ltd, a private company owned by Shoukath Ali Mohammed, was recognised as the Indian students’ employer rather than Mr Mohammed himself, which is an important distinction.

Mr Mohammed, who was the students’ boss at the time, told the ABC he did not dispute the court orders.

He confirmed staff slept at the restaurant but said he provided accommodation to workers when they needed help.

When asked why staff were paid $10 an hour, Mr Mohammed said he had put a lot of his own money into the restaurant and the students were not forced to accept that pay rate.    

He said his restaurant, which is now closed, had also suffered because of the pandemic.

A complicated enforcement process 

A woman looks at the camera smiling.
Lawyer Gabrielle Marchetti says young workers should speak up quickly if they’re not being paid properly.(Supplied: JobWatch)

JobWatch’s principal lawyer Gabrielle Marchetti is no stranger to tracking down “unscrupulous employers”, as she calls them.

Sometimes her work, like many lawyers at community legal centres, involves “playing a private detective”.

Such was the case when Ms Marchetti had to find an employer who “suddenly disappeared” during negotiations in another underpayment case involving three international students.

The Columbian students were engaged by a sole trader to work as commercial cleaners and verbally accepted to work for $20 an hour.

Despite working a combined 522 hours, they had only been paid a total of $740 and no superannuation.

Earlier this year, the Federal Circuit and Family Court of Australia ruled in favour of the three Indian students and three Columbian students, in the two separate cases.

The court ordered compensation of a combined $50,000 for unpaid wages, superannuation and other entitlements.

“But, again, at the end of the day, none of them has actually received the money that they’re owed,” Ms Marchetti said.

“If a dishonest or shameless respondent ignores the court order and simply doesn’t pay, the enforcement process is really complicated.”

Why it’s hard to get the money

A woman holds books and carries a backpack .
Thousands of foreign students have returned to Australia this year.(Unsplash: Element5 Digital )

The six students, who have since all graduated, now have to decide if they want to take further action, which would likely involve hiring sheriff’s officers to seize assets from the employer – assets that may not even exist.

“The sheriff has to physically turn up at whatever address each applicant gives the sheriff and then seize any assets that are in that particular entity’s name,” Ms Marchetti said.

The wages recovery process is further complicated by a legal precedent in small claims matters, where the court only has the power to order the employer to pay compensation, not a third party, like the individual who owns the company.

Ms Marchetti said JobWatch was attempting to get that precedent overturned in court using “strategic litigation”.

“If we are successful with these legal proceedings, the court will be able to make orders in small claims matters not only against the employer but also against any third party who was knowingly involved in the underpayment,” she said.

A photo of two unidentifiable women working at a desk.
Litigation is underway to try and change who can be named as an employer in small claims applications.(Unsplash: Gabrielle Henderson)

This would help address a loophole in the small claims enforcement process, where the owner of a company can shift assets from the company to another account to avoid paying any debts — like unpaid wages.

“I am concerned that even if our poor clients now fork out the money to send the sheriff around to seize assets from the company that employed them … the sheriff may find it’s only a shelf company, with no assets in its name,” she said.

Mr Mohammed confirmed to the ABC that the employer of the Indian students — OzeeOze Pty Ltd — does not currently have any assets in its name.  

Small claims ‘prohibitively’ complicated for vulnerable workers 

A woman sits at a desk and consults another woman.
Solicitor Sharmilla Bargon says lodging a small claim can be a complicated process.(Supplied: Redfern Legal Centre )

In addition to enforcement complexities, Redfern Legal Centre senior solicitor Sharmilla Bargon said the process of lodging a small claim can be difficult for vulnerable workers. 

Ms Bargon said these workers can be “locked out” of the process of recovering unpaid wages because of language barriers and “the complexities of navigating the system”.

“Or … because they are fearful about speaking out about employers and putting their visa at risk,” she said.