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PappaRich Franchisee Facing Court Over Underpayments

PappaRich franchisee facing court over underpayments

A PappaRich franchisee is facing court as a result of allegedly underpaying workers.

The Fair Work Ombudsman alleges the employer owes 154 workers $74,000 across three outlets in Sydney.

PappaRich franchisee facing court

Facing the Federal Circuit Court are Loke Wong and two companies he is associated with, PPR Ryde and Gateharvest.

Fair Work alleges the underpayments happened at the Macquarie Park, Chatswood and Sydney CBD PappaRich outlets.

Wong is accused of paying his employees unlawful flat rates as low as $13 to $14.50 an hour.

As a result, he failed to pay:

  • correct ordinary hourly rates,
  • penalty rates,
  • overtime rates and
  • casual loadings

under the Restaurant Industry Award 2010.

Fair Work alleges Wong underpaid:

  • 73 employees at PappaRich Macquarie Park a total of $34,834,
  • 42 employees at PappaRich Chatswood a total of $22,533, and
  • 39 employees at the PappaRich Sydney CBD outlet a total of $16,633.

Additionally, Wong allegedly breached laws relating to:

  • annual and personal leave entitlements,
  • minimum engagement pay,
  • a split shift allowance,
  • record-keeping
  • and pay slips.

As a result of the legal action, Wong has back-paid the workers in full.

The PappaRich store at Chatswood in Sydney.

Wage theft should be a criminal offence

Miles Heffernan from Fair Work Claims called on the federal government to make wage theft a crime.

“Until we start locking up greedy bosses who deliberately steal from their workers, then wage theft will continue to run rampant,” he said.

Australian Industry Group chief executive Innes Willox argues heavy penalties already exist for employers who deliberately underpay their employees.

“In 2017, the penalties under the Fair Work Act for underpaying staff and failing to keep correct pay records were increased by up to 20 times. 

“These higher penalties are only now starting to work their way through the courts.

“There is no need for the issue to be dealt with under other legislation such as the Crimes Act or the Competition and Consumer Act.

“The characterisation of underpayments as ‘theft’ is misleading, inappropriate, and has the potential to unfairly brand every failure to correctly calculate an employee’s pay as criminal. 

“Many instances of incorrect payment are a result of misunderstandings or errors due to honest mistakes.”

Innes Willox – CEO Australian Industry Group

Mr Heffernan scoffed at Mr Willox’s position.

“What else would Mr Willox suggest we call it when an employer steals money from their employees other than theft?” he asked.

“It is theft, and it should be dealt with by the criminal justice system, just like all other forms of theft.

“And as for Mr Willox’s assertion that most cases of wage theft are the result of innocent mistakes and misunderstandings – well we say that’s nonsense.

“Most cases of wage theft are deliberate and systematic. 

“If a business doesn’t know how to calculate a person’s wages, then they don’t deserve to be in business.”

Wong faces penalties

As a result of the court action, Wong faces penalties of up to $12,600 per contravention, and his companies up to $63,000 per contravention.

Additionally, Fair Work is seeking court orders requiring him to complete workplace relations training.

The Federal Circuit Court has listed the matter for directions hearing on 3 May.

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