NSW restaurants, cafes busted for underpaying workers

Thai restaurants, bars and a popular fast food chain are among a long list of eateries served with fines for underpaying employees. See the list:

Some of the state’s top restaurants have been served hefty fines after underpaying employees by as much as $119,200.

Thai restaurants, bars and a popular fast food chain are among the long list of recent businesses investigated by the Fair Work Ombudsman for short-changing staff their of full wages, overtime or other entitlements.

Latest figures from the ombudsman show underpayment is a growing problem in many workplaces across Australia with the watchdog clawing back $148.4 million entitlements for 69,735 workers in the last financial year.

This represents a 20 per cent increase on the previous 12 month period and nearly five times the money recovered achieved in 2017–18

The ombudsman said industries of key concern were the restaurant and fast food sector, horticulture, sham contracting and cleaning, and large corporate entities.

We take a look at some of the recent cases involving businesses in the cafe and hospitality sector fined for underpayment or ordered to back-pay wages.

BLUE MOON RESTAURANT - WENTWORTHVILLE

The restaurant’s co-owners were fined in the Federal Circuit Court.

The former operators of a western Sydney Indian restaurant found themselves in court after underpaying an employee by more than $150,000.

The Federal Circuit Court fined Blue Moon Restaurant co-owners Rekha Thakadiyal Joseph and Jijo Thiruvankavil Esahac a combined total of $119,200 in October 2020 for short-changing the staff member $153,352 in wages and other entitlements.

The employee, who worked at the restaurant as a kitchen hand and cook from 2013 to 2016, was engaged on a 457 skilled work visa from India on a contractual salary of $54,000.

The court heard Ms Joseph set up a bank account in the employee’s name and for the majority of the worker’s employment maintained overall control of the account.

The pair also retained the bank card and made transactions reducing the account’s funds. During his employment, the worker was paid cash-in-hand wages equating to between $400 to $450 per week, despite generally working 11-12 hours per day, six days per week.

Ms Joseph and Mr Esahac further breached workplace laws for keeping false or misleading records and failing to issue pay slips. Ms Joseph also provided false documentation and information to the Fair Work Ombudsman.

The judge in the case said the conduct was “particularly egregious, given that this was a clearly planned course of conduct which took place over a number of years and involved an extremely vulnerable employee.”

Mr Joseph was ordered to pay penalties of $63,600 and Mr Esahac was ordered to pay $55,600.

SANDWICH CHEFS

Sandwich Chefs was investigated by the Fair Work Ombudsman

A major investigation into fast food chain Sandwich Chefs revealed more than 200 workers across Australia were underpaid their full wages or entitlements.

The Fair Work Ombudsman recovered $182,596 in unpaid entitlements for employees who worked at 32 Sandwich Chefs franchises across Australia, including eight restaurants in NSW.

The investigation, which wrapped up in March this year, found 28 of the 32 restaurants had underpaid employees while 16 of the 32 had breached record-keeping and pay slip obligations.

The most common breaches were underpayment of the minimum hourly pay rate (16 businesses), failure to pay weekend penalty rates (10 businesses) and failure to keep employee records (10 businesses).

In NSW, a total of $34,189 was recovered for impacted workers.

The Fair Work Ombudsman said the investigation had involved interviewing employees, managers and employers along with checking records and pay slips.

“Sandwich Chefs unfortunately is another franchise in the fast food, restaurant and cafes sector where we have found high rates of noncompliance spreading across multiple states,” the ombudsman said.

“Employers can’t pick and choose which wage laws they follow and those doing the wrong thing are being found out.”

UPPER EAST SIDE BONDI

The Upper East Side in Bondi

A former Bondi restaurant and bar was fined more than $20,000 for underpaying staff members including students and workers on international holiday visas.

The Federal Circuit and Family Court issued the $22,050 fine to Upper East Side Cafe in Bondi in December last year after the business breached the Fair Work Act for failing to comply with compliance notices to correctly calculate and back-pay underpayments and superannuation for full-time and casual staff.

The business’s former director Julia Rose Gelonese was also fined $4410.

The fine came after the Fair Work Ombudsman received multiple complaints from workers – including students and employees on working holiday visas – claiming they had been short-changed full wages and other entitlements.

The court heard the impacted staff members worked in both front of house and kitchen roles and had been underpaid penalty rates for working on weekends, evenings, public holidays along with overtime and termination pay.

The judge in the case said the company had shown “a clear disregard for the seriousness of the obligations under the compliance notices”.

COFFEE TRADERS

Photos for feature on underpayments

The owners of a popular cafe in Castle Hill were issued a five-figure fine after underpaying a young waitress by more than $1000.

The Coffee Traders Group Pty Ltd, which operates ‘Coffee Trad3rs’ in the northern Sydney suburb, was fined $11,322 by the Federal Circuit and Family Court in April this year for failing to comply with a compliance notice requiring the calculation and back-payment of entitlements owed to the employee.

The investigation into the business began after the affected worker, who was aged between 18 and 20 at the time of her employment, raised concerns she had not been paid full entitlements.

The company agreed to back-pay the worker $1014.64 in entitlements, plus $146.20 in superannuation after court action was taken by the Fair Work Ombudsman.

The Coffee Traders Group Pty Ltd was fined a total of $11,322 and the company’s sole director Chien Huang Chen was fined $2264.40.

THAI SQUARE WARNERS BAY

Thai Square is located near Lake Macquarie.

The operator of a popular Thai restaurant in Newcastle was fined more than $3000 for underpaying workers including young staff members and visa holders.

The Federal Circuit Court issued the $3402 penalty to Thai Square Warners Bay restaurant owner Supon Phiyasirikul in September last year for breaching the Fair Work Act by failing to comply with a compliance notice requiring him to back-pay workers.

The fine followed an investigation into the underpayment of entitlements owed to several employees who worked the lakeside restaurant between July 2018 and June 2019.

The Fair Work Ombudsman said the investigation focused on underpayment of minimum wage rates for ordinary hours, casual loadings, overtime and penalty rates.

As part of the court order, Mr Phiyasirikul was required to calculate and rectify underpayments owed to workers, plus superannuation and interest.

The judge in the case said the penalty should serve as a deterrence “particularly in light of the fact that the industry is notorious for its underpayment of employees”.

SYDNEY KIMBAB NARA

A photo of the restaurant.

The venue specialises in Korean cuisine.

The owner of a Sydney takeaway food outlet who underpaid a female kitchen assistant over the course of three months was fined $2500 in March this year.

The penalty was issued by the Federal Circuit and Family Court to Heun Ok Kurosawa, who runs the Sydney Kimbab Nara restaurant on George St in the CBD for failing to comply with a compliance notice requiring the back-payment of entitlements to a worker.

The court heard the underpaid worker was on a 417 working holiday visa from South Korea and had been employed as a kitchen assistant at the business for about three months in 2020.

The employee had been paid low, flat rates for all hours worked, resulting in underpayment of her minimum wage rate, casual loadings and weekend penalty rates.

Ms Kurosawa back-paid the worker after the Fair Work Ombudsman commenced legal action.

BLUE MIST BANKSTOWN

Blue Mist Lounge was fined in March this year.

The owner of a former Bankstown cafe was fined after an international student failed to receive wages for a week’s work at the popular restaurant.

The Federal Circuit and Family Court issued a $5328 penalty to former Blue Mist Cafe manager Diaa Mohamed in March this year for failing to comply with a compliance notice requiring him to back-pay the staff member.

The court heard the employee was an international student from the Philippines who was not paid any wages for seven days of work she performed at the cafe in July 2020.

She was also owed minimum wages, as well as penalty rates for weekend work.

The company which owns the cafe was placed into liquidation last year, meaning the Fair Work Ombudsman was unable to pursue a penalty against the organisation.

At the time of the court’s decision in March, the female worker remained unpaid.

SAILS SANDRINGHAM

Sails specialised in seafood.

A former southern Sydney seafood restaurant was fined $20,000 after a court found the business deliberately underpaid wages and superannuation to a staff member.

The Federal Circuit Court imposed the penalty against Sails Waterfront Bar & Grill for failing to comply with a compliance notice requiring it to back-pay an employee.

The company’s sole director Robert Sunna – who was involved in the breach – was also fined $3000.

The restaurant, which closed in late 2019, was found to have underpaid a visa holder from Bangladesh who had worked as a food and beverage attendant at the top-end venue.

The investigation found the business had failed to pay the worker his accrued but untaken annual leave at the end of his employment.

In issuing the fine in September 2021, the judge in the case found that the breach was “deliberate” and the penalty should act as a deterrent to other venues.