$22,000 penalty for Melbourne restaurant operator

The Old Cop Shop in Coburg, Melbourne has copped a $22,050 fine. The penalty was issued after it was found the operator had failed to comply with a Compliance Notice, which required the company to calculate and back-pay underpayments of a former employee.

The Old Cop Shop Eatery Pty Ltd was also ordered to rectify the underpayment of the 21-year-old food and beverage attendant plus interest.

The venue was investigated by Fair Work Inspectors after the employee requested assistance from the Fair Work Ombudsman. The inspector formed a belief that the restaurant had underpaid the employee’s minimum wage rate for ordinary hours, casual loading, and penalty rates for Sunday and public holiday work under the Restaurant Industry Award 2010 between April and June 2019.

“Compliance Notices are an important tool we use to get unpaid wages back into workers’ pockets in a timely manner,” said Fair Work Ombudsman Sandra Parker. “If employers do not comply with Compliance Notices, they can face court-imposed fines in addition to the initial wages back-payment bill.”

Judge Heather Riley found that the contravention was deliberate, The Old Cop Shop had not displayed any co-operation, contrition nor taken any corrective action, and the affected worker was young and vulnerable.

Judge Riley said that general deterrence was “a significant factor in this case, given that the restaurant industry is notorious for underpayments to staff”.

South Yarra restaurant to face court

The operator of another Melbourne restaurant, in South Yarra, will face court on 17 August 2020 over alleged underpayments.

The Fair Work Ombudsman has commenced legal action against James McBride and his company Domain Botanical Business Pty Ltd.

The regulator alleges that the company used flat hourly rates (in some cases as low as $18 per hour) for its casuals at Italian eatery Gilson Restaurant.

The flat rates led to various underpayments of minimum hourly rates, casual loading, overtime rates and penalty rates for weekend, public holiday, early morning and late night work under the Restaurant Industry Award 2010. Some employees were paid higher amounts on public holidays.

It’s further alleged the company failed to undertake reconciliations for its full-time annualised salary employees and breached record-keeping laws, including by failing to record start and finish times for most salaried staff. Reportedly, staff were also not provided the required unpaid meal breaks.

Overall, it’s alleged the underpayments total of $53,850, with 40 employees underpaid between December 2017 and June 2018. Half of the workers were visa holders, most from non-English speaking countries, and about half of the workers were aged 25 or under when they commenced employment.

The affected staff were generally engaged as kitchen attendants, waiters or cooks. The visa holders were most commonly in Australia on student visas, working holiday visas or partner visas, and came from a range of countries including France, Brazil, Nepal and Chile, among others.

Domain Botanical Business Pty Ltd faces penalties of up to $63,000 per contravention, while McBride faces penalties of up to $12,600 per contravention.

The Fair Work Ombudsman is also seeking orders for the company to rectify all alleged underpayments, plus interest and superannuation.

“The Fair Work Ombudsman prioritises enforcement action for matters involving visa holders and young workers, as we know they can be at risk of exploitation due to their visa status, language barriers and a lack of knowledge of workplace laws,” said Fair Work Ombudsman Sandra Parker.

“Employers should take note that it is unlawful to pay flat hourly rates if they fail to cover all of a worker’s entitlements, including loadings and penalty rates. Employers using annual salary arrangements must comply with all relevant rules about reconciling their employees’ payments with hours worked.”

The restaurant was inspected as part of an auditing campaign, with the FWO including the fast food, restaurant and café industry on its list of priorities for compliance and enforcement activities in 2020-21.