Cafe 63 brand owner fined $170,000 for ripping off staff

The owner of the Cafe 63 brand and his company have been fined a total of $170,000 by a judge for ripping off young staff.

The owner of the Cafe 63 brand and his company, which ran the original Cafe 63 in one of Brisbane’s blue-chip suburbs, have been fined a total of $170,000 by a judge for ripping off young staff by insisting they receive a slice of their wages in food and drinks in a practice labelled “abhorrent”.

New Zealand-born Hamish Russell Alexander Watson, 60, from Kangaroo Point, was ordered to pay $40,000 and the company he solely owns, 63 Racecourse Rd Pty Ltd (Racecourse), was ordered to pay $130,000 by Federal Circuit Court Judge Michael Jarrett.

Hamish Watson owner of the cafe 63 brand. Picture: Supplied

Mr Watson is also the sole director of a company or entity described as 63 Group that earns fees by licensing the other cafe 63 brand stores in Queensland, the court decision states.

The chain now has 37 stores.

Judge Jarrett made the orders last week after hearing evidence submitted to the court by the Fair Work Ombudsman (FWO), and agreed to by Racecourse, that it underpaid 33 staff, mostly foreigners on visas, who worked as cooks, kitchen staff and waiters between July and August 2017, and again between November 2017 and January 2018.

Judge Jarrett said the part-payment of staff in food and drink was “abhorrent” and the company and Mr Watson “used the opportunity to employ individual flexibility arrangements to avoid the protections offered to the [company]’s employees by the Restaurant Award”.

The cafe was located at 63 Racecourse Rd in Hamilton, in Brisbane’s inner northeastern suburbs.

Cafe 63 no longer operates from that address at 63 Racecourse Rd and Racecourse has ceased trading, the court heard.

The Cafe 63 at 63 Racecourse Rd, Hamilton which has been closed down. It was the first Cafe 63 store to open. Picture Facebook

It was the first Cafe 63 to open in the state, and was the flagship store and it boasted on Facebook: “We are open 24hrs a day, 7 days a week.”.

The company made back payments to the underpaid staff last year after the FWO launched legal action.

Between July and August 2017 staff were underpaid $36,653 which included underpayments for the minimum hourly wage, casual loading, and penalty rates for weekends, public holidays and overtime.

Between November 2017 and January 2018 breached the Fair Work Act to pay employees in money by paying some staff in food and drink worth $35 per day, the court heard.

Judge Jarrett said the breaches occurred despite the Fair Work Ombudsman telling Mr Watson about his obligations to staff “to enable him to clearly identify the [company]’s obligations”.

“The contraventions relating to the first period and the second period are both deliberate and serious and represent a significant departure from the standards of conduct expected from employers and those that control them,” Judge Jarrett said.

Fair Work Ombudsman Sandra Parker said that improving compliance in the fast food, restaurant and cafe sector and protecting migrant workers remain priorities for the FWO.

“The penalties in this matter make clear that paying flat rates that undercut Award entitlements, and failing to follow the important laws for individual flexibility arrangements or part-time agreements will not be tolerated.”

“We treat matters relating to migrant workers particularly seriously, and are also focused on taking action to improve compliance in the fast food and cafe sector, where many such vulnerable workers are employed.”

“All workers in Australia have the same rights at work regardless of nationality or visa status,” Ms Parker said