A former economics professor who debunked a possible link between immigration and unemployment will face the Federal Circuit Court over allegations he underpaid foreign staff at his Melbourne grocery store.

The Dae Bark Mart grocery store on Flinders Street.

The Fair Work Ombudsman launched legal action against Jordan Shan, a former associate professor of applied economics at Victoria University, over claims he paid as little as $10 per hour to two South Koreans, who were owed more than $14,000.

Court documents also allege that Mr Shan failed to pay penalty rates or annual leave entitlements to the staff, who worked up to seven days a week at the Dae Bark Mart grocery store on Flinders Street.

The two South Koreans were on working holiday visas in 2016 when they were employed by Mr Shan's company Jenni International to stock shelves at his Asian grocery store.