The Fair Work Ombudsman has released the findings of its Degani Bakery and Café compliance activity, which found non-compliance at 15 outlets, including underpayment and record keeping breaches.

The audit of 14 Degani outlets in Melbourne and two in Rockhampton, Queensland resulted in the FWO  recovering a total of $44,165 for 86 underpaid workers.

The FWO also issued 10 formal cautions, eight compliance notices and five on-the-spot fines. Only one outlet was found to be compliant with workplace laws.

This is not the FWO’s first encounter with the Degani chain. In February, the FWO commenced court action against a Degani outlet in Greensborough for allegedly using false records to conceal more than $12,000 in underpayments to workers. The matter remains before the court with a hearing scheduled for 1 October.

Fair Work Ombudsman Sandra Parker said under or non-payment of penalty rates was the most common issue identified by inspectors, as well as underpayment of base rates of pay.

“We uncovered issues with record-keeping at several Degani outlets that hindered our ability to determine exactly how much back-pay the employees were owed,” she says.

Parker says the company’s failure to meet basic workplace requirements is common throughout the industry.

“Recent law changes mean franchisors can now be held liable for workplace breaches by businesses in their networks,” she says. “This report reinforces the need for industry-wide cultural change and hospitality leaders should work with the FWO to support compliance.”

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