Melbourne cafe underpays staff $10,000

01 February, 2018 by
Hospitality Magazine

Degani Bakery Café at Bentons Square, Melbourne, has agreed to back-pay staff almost $10,000 after a Fair Work Ombudsman audit found employees as young as 18 were being underpaid.

The Fair Work Ombudsman discovered the underpayments during a self-initiated compliance activity in 2016 that involved audits of 14 Degani branded cafes in and around Melbourne and two at Rockhampton, Queensland.

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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.

Each of the audited cafes was in franchisee or licensee arrangements with Degani Australia Pty Ltd.

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The Fair Work Ombudsman found 15 workers at the Degani Bakery Cafe in Mornington were underpaid a total of $9375 between September and November, 2016.

The workers were engaged as waiters or cooks and included four juniors under 21 and five others aged 25 or younger.

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The company paid flat hourly rates of between $18 and $21 to its casual employees, which was not sufficient to meet the casual loadings and various penalty rates the workers were entitled to under the Restaurant Industry Award 2010.

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 — Kerry Marie Rowson and her company Degani@Bentons Pty Ltd — to correctly apply advice they received about annualised rates from a workplace relations advisory firm.

Rowson and her company fully cooperated with Fair Work inspectors, agreeing to back-pay workers in full and overhaul their business practices under the terms of an Enforceable Undertaking (EU) entered into with the Fair Work Ombudsman.

The company must also 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.

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