Fair Work Ombudsman Continue to Prosecute for Under-Payment of Wages in the Hospitality Sector
By Greg Arnold, Director & Principal Consultant
16th June, 2021
In spite of the difficulties faced by employers in the hospitality sector by the current COVID pandemic and the resultant shut downs, the Fair Work Ombudsman continues prosecute employers in the hospitality sector for underpayment of wages, and failing to comply with Awards.
In a claim taken by the Fair Work Ombudsman (FWO), the operators of an Italian eatery in Melbourne have been fined a total of $204,120 after the Federal Court found they had underpaid 40 employees a total of $53,850 between December 2017 and June 2018.
The FWO also found that the restaurant had not provided adequate meal breaks, failed to keep records including time records, and did not undertake required reconciliations for full-time annualised salary employees.
The FWO secured court-ordered penalties against the restaurant and its sole director, James McBride. The Court also imposed a penalty of $170,100 against Domain Botanical Business Pty Ltd and a penalty of $34,020 against McBride.
Justice Philip Burchardt of the Federal Circuit Court noted the vulnerability of many of the workers who had been underpaid. More than half were visa holders from mostly non-English-speaking countries, many were on student visas, and 14 of the underpaid visa holders were under the age of 25 when they began to work at the restaurant.
Of McBride, Judge Burchardt wrote in statement: “[i]f he was not deliberate in his breaches of the award obligations, he was, at the very least, wilfully blind to them. Equally, however, the failure to pay employees their wages and to give them their benefits under the award is also, in my view, of commensurate seriousness… bearing in mind the nature of the industry and the disadvantaged nature of the employees.”
Despite the company fully rectifying payments in July last year after litigation was commenced, the company is still required to pay the court-ordered fine in addition to the back-payments.
In another recent case, the former operators of a Bendigo restaurant have been fined $142,000 following legal action by the FWO.
The FWO found that Sona Peaks Pty Ltd, which previously operated the Curry Garden Indian Restaurant in Victoria had been consistently underpaying its staff. The company was fined $118,650, however, the Federal Circuit Court imposed a further penalty of $23,715 against the company’s sole director and part-owner, David Peter Anderson.
The penalties are the result of an investigation and legal action by the Fair Work Ombudsman in relation to employees who were underpaid $11,201 between October, 2012 and September, 2013. The Court has also ordered Sona Peaks to back-pay the workers their outstanding entitlements in full.
The Fair Work Ombudsman revealed last month that the second wave of its National Hospitality Industry Campaign recovered more than $1.2 million for 2752 underpaid food service workers at 456 restaurants, cafes and catering companies nationally.
It is therefore important for all employers to ensure that they are complying with the relevant Awards and also to ensure that they are complying with the provisions of employment legislation, including time and wages records. If you would like to ensure that your payroll is compliant with the Award and the legislative requirements, please contact us at Effective Workplace Solutions and we can conduct a payroll audit, so that you have peace-of-mind if the Fair Work Ombudsman conducts an audit of your business.