The operators of two Melbourne cafes have avoided court action for wage theft by agreeing to back pay 26 employees a total of $24,947.
They are the latest businesses to be offered an Enforceable Undertaking by the Fair Work Ombudsman – which basically means they will not be taken to court, if they agree to back pay their workers, and promise not to do it again.
The agreements have long been criticised by Jeremy Walton from Fair Work Claims, who says the workplace regulator should conduct more enforcement, and take greedy bosses to court where they face huge financial penalties.
“With a budget of $121 million dollars a year, the workplace watchdog lodged just 35 court actions in the last financial year – and the year before, it was proud to announce it achieved an enforcement target of just 6 per cent of all wage theft cases – what an utter disgrace,” Mr Walton said.
“They should be hauling dodgy bosses before the courts so they can be hit with the huge penalties that they deserve.”
The details of the case
Cindy Huynh and her husband Duy Phuong Dang, and two businesses the pair is involved in, operate Cafe Touchwood in Richmond and A Minor Place cafe in Brunswick.
Between January and April last year, the 26 workers were paid flat rates, with part-time employees at each café receiving about $20 an hour, and Cafe Touchwood casual employees paid between $17 and $22 an hour.
This resulted in underpayments of minimum rates for ordinary hours, overtime, and weekend and public holiday penalty rates under the Restaurant Industry Award 2010.
Part-time employees were also not provided various annual leave entitlements, and casual employees at Cafe Touchwood failed to receive their owed casual loading.
The largest amount owed to one worker was $3,852 – a full-time chef who was paid an $18.50 flat rate despite being owed a $21.29 base rate and up to $42.58 for overtime hours.
The Enforceable Undertaking
Ms Huynh and her husband admitted to the underpayments, but rather than face court, agreed to enter into the Enforceable Undertaking, which involves her back paying the workers and making a declaration every six months for the next years, that her workers are receiving their legal minimum wages and entitlements.
They also have to make a payment of $8,000 to the Commonwealth Government’s Consolidated Revenue Fund.
Fair Work Ombudsman Sandra Parker justified the Enforceable Undertaking, saying it would ensure extensive scrutiny for Ms Huynh’s companies going forward.
“These court-enforceable undertakings mean the companies have not only had to pay back the money owed to their employees, but will also face ongoing close attention by the FWO,” Ms Parker said.
“Improving compliance in the fast food, restaurant and café sector is a priority for the agency.”
Media reports led to investigation
The Fair Work Ombudsman confirmed it launched an investigation after a media report about underpayments at Cafe Touchwood.
“In the past, the best way to get the attention of the Fair Work Ombudsman was to get a story in the media, otherwise most workers who had their wages stolen were fobbed off, or told to sort the problem out themselves,” Mr Walton from Fair Work Claims said.
“We have had client after client tell us they were given no assistance by the workplace watchdog.
“Let’s hope that Ms Parker’s recent commitment to change the focus of her agency to enforcement will see justice for more workers – and let’s hope we see less of these Enforceable Undertakings and more court action.”
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