08/02/2017 9:58 AM AEDT | Updated 08/02/2017 2:37 PM AEDT

Biggest Payout Ever As Cafe Owner Demanded Staff Pay Back Wages

Fair Work Australia said staff were also threatened with violence.

Fairfax Media
Albury cafe Canteen Cuisine owner Fares 'Frank' Ghazale.

A regional NSW cafe owner has been ordered to pay out the biggest-ever penalty in the Fair Work Ombudsman's history after it was uncovered staff were forced to pay back wages.

Albury cafe Canteen Cuisine owner Fares 'Frank' Ghazale was found to have coerced staff into paying back portions of their wages under threat of violence, dismissal and withdrawal of support for their visas.

He will be made to pay back a total of $532,910, which beats the previous ombudsman record of $408,348 against a Brisbane 7-Eleven store.

In the Federal Circuit Court, Judge Tom Altobelli said it was a gross exploitation of power.

"(Ghazale) exploited his position of power to extract significant sums from each of the employees, and in effect, pay them wages as low as $6 an hour," Altobelli said.

"It is also highly aggravating that he used violence, and threats of violence, to obtain the repayments."

Of the five employees, Altobelli said two were Indian, and they were treated especially badly, with one staffer saying he lost weight due to stress and couldn't afford to buy a mattress or go out socially.

"The Court should send a message to Australian employers that there is a single set of workplace protections in Australia that provide a safety net to all employees, regardless of their visa status," he said.

Ombudsman Natalie James said she was concerned 'cashback schemes' whereby business owners ask for wages to be refunded, were a growing concern.

"I am concerned that cashback schemes are being utilised by unscrupulous operators in an attempt to get around record keeping laws and disguise serious underpayment of wages," James said.