A popular burger chain has back paid $1.12 million to workers who had been underpaid in order to avoid court action by the Fair Work Ombudsman.
Instead of prosecuting the employer, the regulator offered an Enforceable Undertaking, which means it won’t face court-imposed penalties for breaching the Fair Work Act.
MOS Burger admitted to underpaying the 285 workers across six Queensland stores between 2011 and 2018.
Fair Work inspectors found that the company paid unlawful flat rates to workers, and misclassified some as part-time when they were in fact casuals.
The flat rates meant workers missed out on ordinary hourly rates, casual loadings, and penalty rates for night, weekend and public holiday hours.
Individual underpayments ranged from $18 to $31,975.
The workers were employed to make food, serve customers, and act as store supervisors and managers at outlets in Brisbane, Surfers Paradise, Southport, Broadbeach, Mt Gravatt and Sunnybank.
Workers have been back paid in full
Fair Work said the company has rectified all unpaid wages and superannuation, and paid an additional 7 per cent compensation to workers.
Under the terms of the Enforceable Undertaking, MOS Burgers must fund external auditors to check pay and conditions for workers employed in 2019 and 2020 and rectify any underpayments.
Cosy agreements ‘let dodgy bosses off the hook’
Industrial advocate Miles Heffernan from Fair Work Claims criticised the use of Enforceable Undertakings, saying they “let dodgy bosses off the hook”.
“These cost agreements basically mean if an employer agrees to pay back what they owe, and promises not to do it again, they escape court action and the huge penalties that go with that,” he said.
“In this case, we have a company that has ripped off their workers by more than $1 million, and they have essentially been allowed to get away with it.”
Ombudsman defends use of Enforceable Undertakings
Fair Work Ombudsman Sandra Parker defended the use of Enforceable Undertakings, noting the company’s prompt action to resolve the matter.
“We considered that a Court-Enforceable Undertaking was an appropriate enforcement tool as the company conducted a comprehensive audit of its pay records from when it commenced trading in Australia, fully back-paid workers and overhauled its processes to comply with workplace laws.”
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