Café signs Enforceable Undertaking after underpayment discovered

15 January 2014

A café at Goondiwindi in Queensland's Darling Downs region underpaid a casual employee almost $50,000 over a five-year period, the Fair Work Ombudsman has found.

Gunsynd Café Pty Ltd and its sole director Debra Kaye Ash have agreed to back-pay the male employee a total of $48,586 and revamp their workplace policies to ensure future compliance with workplace laws, following an investigation by the Fair Work Ombudsman.

The underpayment occurred as the result of the employee, engaged as a baker's assistant/labourer, receiving a flat weekly rate of pay as low as $900 for work performed between July, 2007 and February, 2013.

The man worked an average 45-hour week at the Marshall Street business from 6pm to 2am Sunday to Friday.

After investigating a complaint from the employee, the Fair Work Ombudsman found the flat rate was insufficient to cover the employee's entitlement to night work allowances, Saturday penalty rates, Sunday penalty rates, public holiday penalty rates and applicable overtime.

Inspectors also found that Gunsynd Café had failed to issue the employee with payslips and had not kept relevant employment records, including the rate of remuneration, hours worked, overtime records or superannuation contributions.

Following the co-operation of Ms Ash, the Fair Work Ombudsman has entered into an Enforceable Undertaking with her and her company as an alternative to litigation.

As part of the Enforceable Undertaking, they have agreed to apologise in writing to the employee, who no longer works at the café, and fully back-pay him in weekly instalments by the end of November this year.

In the letter, Ms Ash expresses "sincere regret" for the failure to comply with the company's lawful obligations and commits to various measures to ensure similar mistakes do not occur in future.

The Enforceable Undertaking requires Gunsynd to:

  • implement systems and processes to ensure future compliance, including engaging a full-time book-keeper;
  • organise and ensure training on compliance with workplace laws is provided by an accredited workplace trainer for all persons who have managerial responsibility;
  • audit its compliance with pay rates for at least 30 per cent of its employees each year for the next three years, and
  • provide samples of compliant time and wages records to the Fair Work Ombudsman each year for the next three years.

Fair Work Ombudsman Natalie James says Enforceable Undertakings are one of a number of ways the Fair Work Ombudsman is improving the way her Agency is encouraging voluntary compliance with Federal workplace laws.

"We are serious about our job of building knowledgeable and fairer workplaces and don't insist there is only one way to achieve compliance - education, positive motivators and deterrents are all important," she said.

Enforceable Undertakings were introduced by legislation in 2009 and the Fair Work Ombudsman has been using them to achieve strong outcomes against companies that breach workplace laws without civil court proceedings.

"Their purpose is to focus the employer on the tasks to be carried out to remedy the alleged contravention and/or prevent a similar contravention in the future," she said.

"Many of the initiatives included in Enforceable Undertakings - like compulsory training sessions - help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again."
 
Ms James says the Gunsynd Café underpayment is an example to other employers of how a small mistake left over time can subsequently result in a hefty bill for back-payment - but the Fair Work Ombudsman is always happy to consider payment options, such as weekly instalments as agreed, to ensure both the ongoing viability of the business and reimbursement to underpaid employees.

A copy of the Enforceable Undertaking is available on the website at www.fairwork.gov.au

Employers and employees seeking assistance should visit the website or call the Fair Work Infoline on 13 13 94. An interpreter service is available on 13 14 50.

Copy of undertaking:

Media inquiries:

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

Penny Rowe, Media & Stakeholder Relations
0457 924 146
penelope.rowe@fwo.gov.au

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