Former juice and coffee bar business penalised again

24 May 2023

The Fair Work Ombudsman has secured penalties in court for the second time against the former operators of a Melbourne juice and coffee bar and a director, after they kept more than $14,000 in JobKeeper payments instead of paying them to an employee.

The Federal Circuit and Family Court has imposed a $26,640 penalty against Rika Foods North Melbourne Pty Ltd, which operated a juice and coffee bar located inside the Sonsa Markets in Collingwood, and a $5,328 penalty against company director Radomir Pantovic.

The penalties were imposed in response to the company failing to comply with a Compliance Notice requiring it to calculate and back-pay JobKeeper entitlements to a worker, in her early 20s, who had been employed by Rika Foods North Melbourne Pty Ltd on a casual basis.

A Fair Work Inspector had issued the Compliance Notice after Rika Foods North Melbourne Pty Ltd received $14,400 in JobKeeper payments from the Australian Taxation Office for the worker between September 2020 and March 2021 but failed to provide those payments to her.

In addition to the penalties, the Court has ordered Rika Foods North Melbourne Pty Ltd to pay the $14,400 in JobKeeper payments to the worker, plus interest.

The matter follows the Fair Work Ombudsman securing a total of $11,988 in court penalties against Rika Foods North Melbourne Pty Ltd and Mr Pantovic in 2022 for failing to comply with a Compliance Notice requiring back-payment of entitlements to a visa holder worker.

Fair Work Ombudsman Sandra Parker said the failure to follow the law on how JobKeeper payments had to be used is disappointing.

“We are prepared to take enforcement action to protect the integrity of Commonwealth Government-funded schemes designed to have payments provided to workers.”

“When our Compliance Notices are not followed, we are ready to take legal action to ensure workers receive all their lawful entitlements, in addition to pursuing court penalties,” Ms Parker said.

“Employers also need to be aware that taking action to improve compliance in the fast food, restaurant and café sector is an enduring priority for the FWO. Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”

The FWO investigated after receiving a request for assistance from the affected worker.

A Fair Work Inspector issued the Compliance Notice to Rika Foods North Melbourne Pty Ltd in November 2021 requiring it to provide all outstanding JobKeeper payments to the worker within four weeks.

Judge Heather Riley found that the failure to comply with the Compliance Notice was deliberate and involved a failure to back-pay a “substantial amount of money in anyone’s terms, but particularly for a casual worker in the hospitality industry”.

“Of course, the whole point of JobKeeper payments to employers was to enable them to pay their staff when business was slow or non-existent. The point of JobKeeper payments was not for employers to retain the money for their own benefit, as has happened in this case,” Judge Riley said.

Judge Riley found that the company and Mr Pantovic had shown no regret for their conduct and there was a need to impose penalties to deter them and other employers from similar conduct in future.

Judge Riley also ordered that the matter be referred to the Commissioner of Taxation “for investigation into whether the respondents have breached any laws administered by the Commissioner in circumstances where the respondents have admitted to failing to remit JobKeeper payments”.

Employers and employees can visit or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. An interpreter service is available on 13 14 50. Small businesses can find targeted resources at the Small Business Showcase.

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