Kitchen hand back-paid after three-month unpaid probation is ruled unlawful

10 January 2013

Note: Reference to prosecution in this media release is a general reference to the FWO commencing proceedings for the imposition of civil penalties and should not be taken to be a reference to criminal proceedings.

The operator of a Perth take-away food outlet has told the Fair Work Ombudsman he thought it was okay to engage a kitchen hand on a three-month probation without pay.

The employer was one of more than 120 randomly audited in Perth, Adelaide and Darwin as part of a campaign focussing on cafes, restaurants and take-away food shops.

The employer has back-paid the kitchen hand almost $2600 after Fair Work Inspectors explained that a three-month unpaid probationary period with no guarantee of ongoing employment was a breach of the Fair Work Act.

The kitchen hand is one of 269 employees throughout Perth, Adelaide and Darwin who have been reimbursed a total of $222,305 after inspectors found they had been short-changed.

In another case, nine casual employees at an Adelaide restaurant have been back-paid a total of $57,000 - an average of $6300 each - after it was found their employer was paying them a flat rate of $15 an hour for all hours worked, below the national minimum wage rate for casual employees.

Fair Work inspectors scrutinised the books of cafes, restaurants and take-away food outlets in Adelaide’s Gouger and Rundle streets and at North Adelaide, in Perth’s CBD and southern suburbs, and throughout Darwin.

In its statement of findings released today, the Fair Work Ombudsman revealed that with 121 audits finalised, 71 employers (59 per cent) were found to be compliant with workplace laws.

Of the 50 employers (41 per cent) that recorded contraventions, 38 had underpaid staff, while 12 had only technical contraventions relating to record-keeping and payslips.

A further three businesses, all in Perth, remain under investigation.

The Fair Work Ombudsman decided to conduct an education and compliance campaign focussing on cafes, restaurants and take-away food shops after noting that the sector employs large numbers of vulnerable workers, including juniors, casuals and foreign workers, and was generating high numbers of complaints.

Findings:

South Australia: Thirty-seven (63 per cent) of the 59 employers audited were compliant. Of the 22 businesses that were non-compliant, 17 had underpaid 129 staff a total of $97,309. Inspectors reported that many non-compliant businesses had relied on advice relating to pay rates from third parties which was often incorrect.

Western Australia: Twenty-four (56 six per cent) of the 43 employers audited were compliant. Of the 19 businesses that were non-compliant, 12 had underpaid 66 staff a total of $62,128. Inspectors found most non-compliant employers were unfamiliar with the changes in pay rates effective from July, 2012.

Northern Territory: Ten (53 per cent) of the 19 employers audited were compliant. The nine non-compliant businesses all had monetary contraventions and had underpaid 74 staff a total of $62,868. Inspectors found that most non-compliant employers were from a non-English speaking background and had limited understanding of their obligations under workplace laws.

A key aim of the campaign was to increase awareness of workplace laws, including Modern Awards and the National Employment Standards.
 
Acting Fair Work Ombudsman, Bill Loizides, said the results highlight the importance of our targeted activity and the need for ongoing education and compliance activity in this sector.

“Although we were disappointed to find both a high rate of contraventions and underpayments, we were pleased that all contraventions were voluntarily rectified,” Mr Loizides said.

“If inspectors find minor or inadvertent contraventions, the Fair Work Ombudsman’s preferred approach is to educate the employer and assist them to voluntarily rectify the issue.”

The Fair Work Ombudsman recently announced that the Hospitality & Accommodation industry will be the subject of a three-year, phased national campaign (see: Accommodation providers, pubs, bars and taverns focus of new national campaign).

This will allow inspectors to continue to provide education and assistance to cafes, restaurants and take-away food outlets.

Employers or employees seeking information and advice should visit www.fairwork.gov.au or call the Infoline on 13 13 94 from 8 am-6 pm weekdays.
 
The website has a number of tools and resources, including PayCheckPlus and an Award Finder, to assist business owners to calculate the correct pay for their employees.

An ‘Industries’ section on the website provides extra, specialised information for employers and employees in a range of industries, including fast food and hospitality.

Follow the Fair Work Ombudsman on Twitter @fairwork_gov_au external-icon.png or find us on Facebook external-icon.png.

Campaign result:

Media contact: 08 8225 8263 (all hours)

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