The operator of two popular Melbourne restaurants is facing court after a raid conducted as part of a joint-operation allegedly discovered employees had been underpaid almost $31,000 over a period of just two weeks.
The employees, mostly overseas workers on working holiday and student visas, were allegedly underpaid at Tina’s Noodle Kitchen in Box Hill and Dainty Sichuan, on Swanston Street in the Melbourne CBD.
The Fair Work Ombudsman has commenced legal action in the Federal Circuit Court against the restaurants’ owner-operator Ye Shao and his companies, Nine Dragons Pty Ltd and Wynn Sichuan Pty Ltd.
The companies’ in-house accountant Yizhu “Jessica” Ding is also facing court for allegedly being an accessory to underpayment and record-keeping contraventions.
Fair Work Ombudsman inspectors and Department of Immigration and Border Protection officers made unannounced visits to the restaurants last year as part of a joint activity.
During the visits, inspectors spoke with workers and managers and exercised their powers under the Fair Work Act to take copies of time-and-wages records stored on-site.
Fair Work inspectors allegedly found that a total of 30 employees across the two restaurants had been underpaid a total of $30,995 during the two-week period targeted for audit in June 2016.
It is alleged 17 employees at Dainty Sichuan were underpaid $18,190 and that 13 employees at Tina’s Noodle Kitchen were underpaid $12,805.
It is alleged employees were paid flat rates ranging from $10 to $22 an hour, despite some employees working six or seven days a week, and more than 10 hours per day.
This allegedly led to significant underpayment of the minimum hourly rates and penalty rates for weekend, public holiday, overtime and late night work the employees were entitled to under the Restaurant Industry Award 2010.
Under the Award, employees were allegedly entitled to penalty rates of more than $40 for some hours. Record-keeping and pay slip laws were allegedly also contravened.
The companies have commenced back-paying the employees.
Acting Fair Work Ombudsman Mark Scully says a decision was made to commence litigation because of the allegedly blatant underpayment of vulnerable overseas workers.
Shao and Ding face maximum penalties of up to $10,800 per contravention and Nine Dragons Pty Ltd and Wynn Sichuan Pty Ltd face penalties of up to $54,000 per contravention.
To ensure restaurant staff are now being paid their minimum lawful entitlements, the Fair Work Ombudsman is also seeking a court order requiring the companies to commission a professional external audit of pay practices and report the results to the Fair Work Ombudsman.
A directions hearing is listed in the Federal Circuit Court in Melbourne on August 28.
Scully says the Fair Work Ombudsman is committed to improving compliance in the hospitality industry and focused on ensuring culturally and linguistically diverse business operators understand and comply with Australian workplace laws.
“It is not okay for employers to arbitrarily determine low, flat rates of pay,” says Scully. “Minimum wage rates apply to everyone in Australia — including visa-holders — and they are not negotiable.”
Scully says managerial staff should also be aware that the Fair Work Ombudsman is prepared to take legal action against anyone allegedly involved in operating a business model that involves the exploitation of workers.
“This can include human resources and payroll officers, line managers, accountants and advisors,” says Scully.
Fair Word Ombudsman Natalie James will speak at the 2017 Restaurant Leaders Summit on 31 July 2017. For more information and to purchase tickets click here.