The operator of a number of PappaRich restaurants is facing legal action after allegedly underpaying 154 workers $74,000 across three outlets in Sydney.
Loke Cheng Wong and two companies he is associated with, PPR Ryde Pty Ltd and Gateharvest Pty Ltd, are facing the Federal Circuit Court over the alleged wage theft, which is believed to have happened at the Macquarie Park, Chatswood and Sydney CBD PappaRich franchise outlets.
According to the Fair Work Ombudsman, the underpayments happened between 29 May and 2 July 2017, with employees allegedly paid flat rates as low as $13 to $14.50 per hour.
The underpayments meant meant the workers didn’t receive the correct ordinary hourly rates, penalty rates, overtime rates and casual loadings they were entitled to under the Restaurant Industry Award 2010.
In total, it is alleged that 73 employees who primarily worked at PappaRich Macquarie Park were underpaid $34,834, a further 42 employees at PappaRich Chatswood were underpaid $22,533, and 39 employees at the PappaRich Sydney CBD outlet were underpaid $16,633.
Some of the employees worked at more than one of the three stores.
Laws relating to annual and personal leave entitlements, minimum engagement pay, a split shift allowance, record-keeping and pay slips were also allegedly breached by Mr Wong and his companies.
All the workers have been back-paid in full, except for two who have yet to be located.
Wage theft should be a criminal offence
Miles Heffernan, Litigation Director at Fair Work Claims, once again called for wage theft to be made a criminal offence.
“Until we start locking up greedy bosses who deliberately steal from their workers, then wage theft will continue to run rampant – especially in industries like hospitality, fast food and retail,” he said.
Australian Industry Group chief executive Innes Willox said very heavy penalties already exist for employers that deliberately underpay their employees and the Fair Work Ombudsman “is a well-resourced and effective regulator”.
“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,” Mr Willox said.
“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.”
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 – it is theft, and it should be dealt with by the criminal justice system, just like all other forms of theft,” he said.
“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 and his company facing financial penalties
Mr Wong faces penalties of up to $12,600 per contravention, and his companies up to $63,000 per contravention.
The Fair Work Ombudsman is seeking court orders requiring Mr Wong to complete its online workplace relations training.
The matter is listed for a directions hearing in the Federal Circuit Court in Sydney on 3 May.
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