Cupcake retailer and company director penalised

9 August 2021

The Fair Work Ombudsman has secured $49,896 in penalties in court against the operators of the ‘Little Cupcakes’ stores in the Melbourne CBD for underpaying employees.

The Federal Circuit Court has imposed a $41,580 penalty against Shri Krishna Guru Pty Ltd, which operates Little Cupcakes retail stores in the Melbourne CBD - on Degraves Street, William Street - and previously operated a store on Queen Street. The company also operates a baking facility in Armadale.

In addition, the Court has imposed an $8,316 penalty against company director Shreyansh Dharmesh Shah.

The penalties were imposed in response to Shri Krishna Guru Pty Ltd underpaying 35 employees a total of $57,179.69 between January 2018 to February 2019, and contravening record-keeping and pay slip laws. Mr Shah was involved in the contraventions.

The underpaid employees worked across the Little Cupcakes stores and the baking facility. Ten of the employees were juniors aged under 21 and most of the employees were visa holders, from countries including South Korea, India and Indonesia.

Judge Karl Blake said the matter involved deliberate, sustained, serious breaches, which affected employees who were vulnerable to exploitation. Judge Blake also said there was a need to impose penalties to create general deterrence.

“There is significant non-compliance by employers in the takeaway food services industry and there is a need to deter non-compliance with workplace laws in that industry,” Judge Blake said. 

Fair Work Ombudsman Sandra Parker said that improving compliance in the fast food, restaurant and café sector remained a top priority.

“The underpayment of young and vulnerable workers is a particularly concerning feature of this matter and employers need to be aware there are serious consequences for such conduct,” Ms Parker said.

“We will continue to enforce workplace laws in a proportionate manner during the COVID-19 pandemic and hold employers to account in order to protect employees. Any workers with concerns about their pay or entitlements should contact us,” Ms Parker said.

Fair Work Inspectors audited Shri Krishna Guru when targeting restaurants and cafes in the popular Degraves Street and Hardware Lane dining strips in the Melbourne CBD with unannounced workplace visits.

Most of the underpayments of Shri Krishna Guru employees related to underpayment of casual loadings under the Fast Food Industry Award 2010. Employees were also variously underpaid leave loadings, minimum-engagement pay, minimum hourly rates and loadings for weekend, public holiday, evening and overtime work under the Award.

Underpayments of individual workers ranged from $20.08 to $10,960.77. The company has rectified the underpayments in full.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. A free interpreter service is available on 13 14 50. Anonymous reports can be made in English and 16 other languages at www.fairwork.gov.au/tipoff.

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Media inquiries:

Ryan Pedler, Assistant Director - Media
Mobile: 0411 430 902
ryan.pedler@fwo.gov.au

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