Spot checks conducted by the Fair Work Ombudsman have found that 929 employees at takeaway food outlets around the country have been underpaid hundreds of thousands of dollars.
A total of 223 businesses were found to have short changed the employees a total of $582,410, with one business owing its staff more than $35,000.
The underpayments were uncovered during the third and final stage of the Ombudsman’s three year National Hospitality Industry Campaign (2012-2015), which was instigated as a result of more than 4,500 requests for assistance being made by 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.
After being asked to supply time and wage records, 53 percent of businesses were found to be paying their employees correctly, with just 33 percent fully compliant with all payslip and record keeping obligations.
Six businesses received formal Letters of Caution putting them on notice about the need for future compliance with their workplace obligations.
State-based recoveries were:
- $154,609 for 269 employees in Victoria,
- $132,433 for 218 employees in Queensland,
- $99,527 for 140 employees in South Australia,
- $84,517 for 120 employees in NSW,
- $32,076 for 41 employees in the Northern Territory,
- $30,245 for 54 employees in Western Australia,
- $26,305 for 60 employees in Tasmania, and
- $22,698 for 27 employees in the ACT.
Fair Work Ombudsman Michael Campbell said the results show that the takeaway food sector requires behavioural change adding that the hospitality sector will remain a priority industry, earmarked for ongoing education and support.
“Clearly, the takeaway food sector, an industry comprised largely of small businesses, is grappling with the complexity of the IR system and few it seems are joining industry bodies to seek professional help and advice,” he said.
“It is important that major players in the hospitality sector, industry groups and intermediaries such as accountants and lawyers, all play their part to help lift the levels of compliance above what we are seeing now.”
Campbell said the most common wage error identified was the underpayment of minimum hourly rates.
“Inspectors found some employers providing flat rates of pay for all hours worked, with many advising they had adopted this practice to simplify their payroll processes,” he said.
“In nearly one-third of cases, the hourly rate paid was not enough to cover hours attracting penalty rates and loadings, resulting in additional errors.”
A number of businesses were also inadvertently paying their staff under the Restaurant Industry Award instead of the Fast Food Industry Award because the business provided both takeaway and dine-in services.
Campbell said Agency officials will continue to provide ongoing education and support to the hospitality sector to encourage and improve compliance levels. This will include presentations and information sessions for key stakeholder groups.
Businesses found to be non-compliant during the three waves of the campaign may also be included in a new National Compliance Monitoring Campaign, targeting employers who have previously been found with contraventions.
The Fair Work Ombudsman’s 2014-15 annual report revealed that hospitality continues to generate high numbers of calls to the Fair Work Infoline and accommodation and food services accounts for the highest number of requests for assistance from employees.