Restaurant, café and catering services workers share more than $1.2 million back-pay

25 June 2015

Food services workers in restaurants, cafés and catering companies throughout Australia have been underpaid over $1.2 million, spot checks by the Fair Work Ombudsman have revealed.

A total of 456 businesses were found to have short-changed 2752 employees more than $1.215 million.

One worker was owed more than $40,000.

More than $386,000 was recouped for 698 employees in Victoria alone.

The underpayments were identified as part of the second wave of the Fair Work Ombudsman’s National Hospitality Industry Campaign.

Fair Work Ombudsman Natalie James says 1066 employers were asked to supply their 2012-13 time and wages records for assessment.

Only 42 per cent (451) were fully compliant with their workplace obligations.

A total of 879 individual errors were identified at 615 businesses.

Almost 20 per cent of mistakes related to weekend penalty rates.

“The majority of errors related to wage entitlements,” Ms James said today when releasing a report on the campaign findings.

“Employers were paying flat rates for all hours worked, which was often not enough to cover penalties, loadings and overtime.”

Fair Work inspectors issued two formal Letters of Caution and two on-the-spot fines.

Ms James says a 58 per cent contravention rate shows an ongoing need for intervention by the Fair Work Ombudsman in the food services sector.

“According to recent data, this is an industry with a vulnerable workforce comprised largely of young employees and low-skilled employees,” she said.

The Fair Work Ombudsman found low rates of employer group membership, which it is now encouraging as a means of improving compliance rates.  

State-based recoveries were:

  • $386,389 for 698 employees in Victoria,
  • $355,980 for 846 employees in Queensland,
  • $282,996 for 788 employees in NSW,
  • $63,967 for 193 employees in SA,
  • $51,650 for 62 employees in WA,
  • $29,795 for 77 employees in Tasmania
  • $25,767 for 45 employees in the NT, and
  • $18,759 for 43 employees in the ACT.

More than 52,000 employers were contacted by the Fair Work Ombudsman in advance of the campaign.

Major stakeholders were also notified, including Restaurant and Catering Australia, United Voice, the Franchise Council of Australia, the Shop Distributive and Allied Employees Association, Australian Culinary Association, the Service Industry Legal Service and the Japanese/Australian Catering and Restaurant Information Service.

The National Hospitality Industry Campaign was split into three sub-sectors – accommodation, pubs, bars and taverns; restaurants, cafes and catering services; and take-away foods.

Results of the first wave of the National Hospitality Industry Campaign for pubs, bars, taverns and accommodation houses were released in December, 2013.

Of 750 businesses audited, 515 (69 per cent) were found to be compliant.

Just over 100 employers were required to back-pay $367,000 to 629 workers found to have been short-changed their minimum entitlements.

Ms James says the hospitality sector was targeted for attention over three years from 2012-15 in response to more than 4500 requests for assistance from employees in 2010-11, a high volume of calls to the Fair Work Infoline and a number of litigations against hospitality businesses for breaches of workplace laws.

In 2008, a national hospitality campaign involving 664 employers saw more than $1.6 million in underpaid wages and entitlements returned to a total of 4679 workers across the country.

Nine regional compliance programs involving the hospitality sector were also undertaken between 2010 and 2012 which returned $680,421 to 2271 workers who had been short-changed.

Ms James said the Fair Work Ombudsman was committed to helping employers to understand and comply with workplace laws, but operators also needed to make an effort to get the basics right in the first place.

She urged hospitality businesses to use the online tools and resources available to them free of charge at www.fairwork.gov.au.

These include pay calculators to determine the correct Award and minimum wages for employees, templates for pay-slips and time-and-wages records and a range of fact sheets on workplace entitlements.

Employers and employees seeking advice can also call the Fair Work Infoline on 13 13 94. A free interpreter services is also available on 13 14 50.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.

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Media inquiries:

Nicci de Ryk, Senior Media Adviser
Mobile: 0466 522 004
nicci.deryk@fwo.gov.au

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