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Pendlebury Workplace Law is a specialist workplace relations and employment law legal practice based in Sydney.

Court frowns on rewarding workers with Coke and pizza – and issues penalties

Court frowns on rewarding workers with Coke and pizza – and issues penalties

Paying with pizza and Coke

Paying with pizza and Coke

Giving teenage employees free and discounted pizzas and soft drink instead of wages has been frowned on by the Federal Circuit Court as a practice belonging “in the dark ages rather than twenty first century Australia,” and has cost a pizza franchise, La Porchetta, operator $335,000 in fines; Fair Work Ombudsman v Bound for Glory Enterprises Pty Ltd & Anor [2014] FCCA 432 (6 June 2014), and Fair Work Ombudsman v Zillion Zenith International Pty Ltd & Anor [2014] FCCA 433 (6 June 2014).

Federal Circuit Court Judge John O’Sullivan found Mr. Ruby Chand, owner of two (2) companies that operated La Porchetta pizza and pasta restaurant franchises in outer eastern Melbourne, guilty of underpaying more than 100 young employees a total of $258,000 between 2009 and 2012.

His Honour said, “on any description of the conduct involved here the nature and extent of it warrants severe sanction by way of penalty…Where the conduct involved represents such a fundamental breach of the safety net payments that are at the heart of the objects of the Fair Work Act and where the [companies] are still operating, any penalty arrived at must send a clear and unambiguous message to the [companies] by way of penalty to deter the possibility they will repeat the breaches.” 

After a Fair Work Ombudsman investigation, the two (2) companies admitted to:

  • failing to pay correct minimum pay rates;
  • failing to pay casual loadings;
  • failing to accrue annual or personal leave; 
  • failing to pay outstanding annual leave entitlements on termination; and 
  • failing to keep accurate records.

Judge O’Sullivan said he was particularly concerned that the two (2) companies claimed more than $45,000 from the Federal Government for employing trainees who were then not given the minimum number of hours required by the traineeship contracts.

Judge O’Sullivan said that investigations in 2007, 2008 and 2009 had also found problems with unpaid wages and entitlements and that Mr. Chand had been warned that he had to meet legal requirements.

The employees affected by the contraventions were mostly teenage part-time and casual cooks, kitchen attendants and waiting staff, with underpayments ranging from $3 to $25,358.

Judge O’Sullivan fined the two (2) companies $139,507.50 each, and Mr. Chand a further $56,000 personally.

His Honour also ordered that $80,000 in outstanding entitlements be repaid to employees who had not been fully reimbursed.

 

Brooke Pendlebury
Wednesday, June 11, 2014
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