Paying cash or under award wages

Penalties up to $1,000,000 for deliberately falsifying record to cover underpayment of staff wages could be imposed on a Melbourne Café Franchisee.

The Franchisee of a Melbourne Cafe has agreed to pay back staff almost $10,000 and could be penalised close to $1 million for deliberately falsifying records to cover systemic underpayment of staff wages.

The Fair Work Ombudsman discovered the underpayments during an audit of 14 Degani branded cafes in Melbourne and Rockhampton, in Queensland.

The audits checked whether workers were being paid their lawful minimum entitlements after employee enquiries and intelligence received by the Fair Work Ombudsman raised concerns some Degani Bakery Cafes were not meeting their obligations.

The director of the company which owns and operates a Degani Bakery Cafe in Mornington, , will face the Federal Circuit Court after the Fair Work Ombudsman (FWO) alleged he created fraudulent records to conceal underpayments to 15 employees.

Between September and November 2016, it is alleged this business underpaid the workers wages up to $12,506. The cafe paid wages paid flat hourly rates of between $18 and $21 to its casual employees which is below the base rates including casual loading of $20.09 and public holiday rates of up to $40.18.

It is alleged by a worker that management asked them to sign blank time sheets which were then completed with false hours, while another claimed he was asked to change his work dates for Australia Day and Labour Day, to avoid paying the public holiday penalty rates.

The FWO said the company was fully aware of his obligations, having completed its online training course and also receiving advice from the franchisor, meaning the underpayments and record tampering were not accidental oversights.

The company also breached the Award by failing to provide unpaid meal breaks for employees who worked more than five hours, roster part-time employees for at least three consecutive hours and pay annual leave loading.

A contributing factor in the underpayments was the failure of the Mornington outlet’s operators to correctly apply advice they received about annualised rates.

The company must apologise to workers and display notices detailing its breaches in the workplace and on the company’s website.

The company must also commission professional audits of its compliance with workplace laws across the next two years and rectify any breaches; provide training on workplace laws to all managerial staff and information to all employees; register with the Fair Work Ombudsman’s online My Account portal and develop processes for future compliance.

Each contravention of Fair Work laws can see penalties of $54,000 for companies and $10,800 for individuals.

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