13 April 2011
Hungry Jack’s fined for underpaying almost 700 staff over $665,000
Fast food retailer Hungry Jack’s Pty Ltd has been fined $100,500 after underpaying almost 700 of its Tasmanian employees hundreds of thousands of dollars.
The penalty, the result of a prosecution by the Fair Work Ombudsman, was handed down in the Federal Magistrates Court in Melbourne late yesterday.
Federal Magistrate Philip Burchardt imposed the penalty after Hungry Jack’s admitted underpaying 693 of its Tasmanian employees a total of $665,695 between March, 2006 and August, 2008.
Hungry Jack’s also admitted further breaching workplace laws by failing to keep proper employment records.
In his judgment, Federal Magistrate Burchardt described the conduct of Hungry Jack’s as “contravention on a major scale”, saying the total underpayment was “enormous”.
“More than 30 employees were underpaid more than $4000 each and the highest individual underpayment was over $10,000,” he said.
“These underpayments have all been rectified but the fact is that the relevant employees were denied the sums that they were lawfully due at the time they were actually working.
“It is not unreasonable to suppose that employees in this industry, where wages are scarcely munificent, may have been significantly disadvantaged.”
Fair Work Ombudsman Executive Director Michael Campbell says the scale of the underpayment of many young workers was a key reason the Fair Work Ombudsman decided to prosecute.
“This penalty sends a clear message that the underpayment of young and vulnerable workers will not be tolerated,” Mr Campbell said.
“We expect large corporations to exercise their workplace responsibilities, particularly when they employ large numbers of vulnerable workers who are unlikely to know or exercise their workplace rights.”
The underpaid employees worked at six Hungry Jack’s owned-and-operated stores in Devonport, Glenorchy, Hobart, South Hobart, Launceston and Mowbray.
Hungry Jack’s paid the employees according to rates contained in an agreement it made with the Shop, Distributive & Allied Employees’ Association (SDA) - but the agreement was never officially registered with or certified by the Australian Industrial Relations Commission.
The employees should therefore have been paid according to rates contained in the relevant Tasmanian awards relating to their positions, such as the Restaurant Keepers Award and National Training Wage (Tasmanian Private Sector) Award.
Hungry Jack’s failure to register the agreement resulted in it underpaying its employees’ minimum hourly rates, penalty rates for weekend, public holiday and overtime work, annual leave entitlements, minimum engagement pay and casual loadings.
The underpaid employees included full time, part-time and casual workers. Most were young, including more than 70 trainees.
Federal Magistrate Burchardt said he accepted Hungry Jack’s did not willfully disobey the law but noted “it was Hungry Jack’s responsibility every bit as much as the SDA’s to ensure the agreement was certified”.
Hungry Jack’s submitted in court that no or minimal penalties should be imposed for a variety of reasons - but Federal Magistrate Burchardt said “Hungry Jack’s simply cannot evade its ultimate responsibility for its actions”.
“One might perhaps even say as a large employer with major resources available to it, it was Hungry Jack’s responsibility to ensure that it met its lawful obligations in relation to compliance with industrial instruments,” he said.
“Indeed it is because it was such a large employer that the single error produced such significant results.
“It is important that large corporations be reminded of their obligations and be deterred from failure to discharge them.”
Fair Work inspectors discovered the underpayments when they audited Hungry Jack’s in 2007 during a national campaign targeting the fast food industry.
After conducting its own assessment of the underpayments, Hungry Jack’s back-paid almost $904,000 to more than 800 current and former staff in 2009.
However, Fair Work inspectors assessed the underpayments to be less – a total of $665,695 owed to 693 employees.
Federal Magistrate Philip Burchardt said Hungry Jack’s has not sought and will not seek to recover the overpayments from the relevant employees.
Mr Campbell says it is important to note that successful prosecutions such as the one against Hungry Jack’s benefit employers who are complying with workplace laws because it helps them to compete on a level playing field.
Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au. An interpreter service is available on 13 14 50.
Fair Work Ombudsman v Hungry Jack's Pty Ltd (pdf 166KB)
Ryan Pedler, Senior Adviser, Media & Stakeholder Relations
(03) 9954 2561, 0411 430 902