Hospitality Fair Work
Case Study
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$192,500
($29,500 for the owners and $163,000 for the company)
13 employees
$26,707
3.5 months
Case overview
The operators of a Melbourne restaurant have been hit with nearly $200,000 in penalties, after a Judge ruled they deliberately underpaid workers. Owners of a restaurant at a Victorian Shopping Centre has been penalised $29,500 and their company has been penalised an additional $163,000. The penalties, imposed in the Federal Circuit Court, are the result of an investigation and legal action by the Fair Work Ombudsman. The company also contravened workplace laws by failing to keep proper employment records and failing to comply with a Notice to Produce pay records. A Fair work spokesperson said the underpayments were a “significant imposition upon workers who are earning low rates of pay”.
Case facts
What they should have done
The staff were entitled to higher pay rates, penalty rates, night and public holiday rates. In addition, they were also underpaid casual loading, shift allowances and annual leave entitlements.
How Happy HR could have helped
Award Interpretation
Correct pay and allowances
Better HR records and induction
Happy HR ROIA $200,000 Fair Work penalty = 66 years of Happy HR subscription
Got questions?
Frequently asked questions
What happened in this Hospitality Fair Work case study?
The operators of a Melbourne restaurant were penalised nearly $200,000 after deliberately underpaying 13 employees over a three-and-a-half-month period in 2015. The Fair Work Ombudsman found that employees were not receiving their correct minimum wages and other employment entitlements, resulting in $26,707 in total underpayments.
Why were the restaurant employees underpaid?
The restaurant paid employees flat hourly rates that failed to meet minimum wage requirements and applicable penalty rates under the Restaurant Industry Award 2010. Employees were also underpaid weekend, overtime, night and public holiday rates, as well as casual loading, shift allowances and annual leave entitlements.
What were the consequences for the restaurant owners?
The restaurant owners were penalised $29,500, while the company received an additional $163,000 penalty. The business was also found to have breached workplace laws by failing to maintain proper employment records and failing to comply with a Notice to Produce pay records. All 13 affected employees were eventually back-paid in full.
What should the restaurant have done differently?
The restaurant should have correctly applied the Restaurant Industry Award 2010 and ensured employees received their minimum hourly rates, weekend and overtime penalty rates, night and public holiday rates, casual loading, shift allowances and annual leave entitlements. Maintaining accurate employment records and responding to Fair Work requests were also essential.
How could Happy HR have helped prevent these Fair Work issues?
Happy HR could have helped the restaurant identify gaps in its pay practices through its employee induction process, HR system and support services. By providing guidance on correct award interpretation, employee pay rates and allowances, Happy HR could have helped the business understand its workplace obligations and reduce the risk of underpayments.
See how Happy HR helps hospitality businesses reduce HR risks.
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