Campaign of “obfuscation” results in $84,500 penalty for Gold Coast restaurant
24 February 2015
The operators of a Gold Coast restaurant have been fined a total of $84,500 after engaging in a campaign of “obfuscation” aimed at avoiding having to back-pay nine employees who had been short-changed almost $17,000.
The Fair Work Ombudsman put the matter before the Federal Circuit Court in Brisbane after the restaurant failed to co-operate with its efforts to resolve the matter by agreement.
Judge Michael Jarrett has now found that the restaurant deliberately tried to avoid its obligations to its underpaid staff.
The Hub@Varsity - a tapas bar and restaurant at Varsity Lakes - underpaid the workers a total of $16,881 in wages and entitlements between December, 2011 and December, 2012.
The venue’s manager and part-owner, Graham John Bell, has been fined $14,500 and his family company, The Hub@Mermaid Pty Ltd, a further $70,000.
The Court has also ordered the company to undertake a self-audit of its 2013-14 financial year pay practices at the restaurant and to report back on its findings to the Fair Work Ombudsman within three months.
The underpaid employees worked as kitchen hands, cooks and waiters and included one worker aged 19-20 who was short-changed $6027.
After receiving complaints from employees in 2012, Fair Work inspectors contacted Bell to try to resolve the matter, but Judge Jarrett found that he was “entirely uncooperative”.
“A series of appointments were made and were either rescheduled or simply not kept,” Judge Jarrett says in his penalty decision.
The Fair Work Ombudsman issued Notices to Produce employment documents and ultimately a Compliance Notice in 2013 requiring back-payment of nine employees.
Judge Jarrett found that Bell and his company chose to ignore them and behave in a “highly evasive” manner, which obstructed the investigation and made it difficult for inspectors to determine amounts owed to employees.
He found that Bell, on behalf of the restaurant, had taken “deliberate action” to avoid responsibilities to employees and engaged in “nothing more than obfuscation and avoidance”.
Judge Jarrett said the underpayments were a serious failure to pay the most basic Award provisions and were “especially egregious” for the employees.
“These are young, relatively unskilled workers earning low rates of pay,” he said.
“Two of the employees were not paid at all and of the remaining seven, six were not paid between 70 and 85 per cent of their entitlement.”
The underpayments were finally rectified in June last year.
Judge Jarrett said there was a need to send a warning to other employers and to ensure compliance with minimum standards to “ensure that there is a level playing field for employers in relation to wage costs”.
“The nature of the breaches and the flagrant disregard of the (Fair Work Ombudsman’s) attempts to investigate and resolve this matter call for a high penalty,” he said.
Judge Jarrett said the failure to issue pay slips to staff was also a serious breach because it disempowered employees by making it more difficult for them to check they had been paid correctly.
Fair Work Ombudsman Natalie James says underpaying employees’ basic entitlements and then refusing to co-operate with inspectors is a recipe for enforcement action by the Agency.
“We made extensive efforts to resolve this matter outside the Courts, but were left with no option to commence legal action because of the complete lack of co-operation we encountered,” Ms James said.
“Our first preference is always to work with employers to assist them to rectify their non-compliance co-operatively, but we will not tolerate employers not taking our correspondence and demands seriously.”
Under the Fair Work Act, employers must comply with requests from Fair Work inspectors to provide records relating to employees and former employees.
Employers must also comply with Compliance Notices issued by Fair Work inspectors or make a Court application for a review of the Compliance Notice if they are seeking to challenge it.
Workplace laws also stipulate that employers must provide employees with a pay slip within one working day of pay day.
Employers and employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au. A free interpreter service is available on 13 14 50.
Ryan Pedler, Assistant Media Director
Mobile: 0411 430 902
Tom McPherson, Media Adviser
Mobile: 0439 835 855