Brisbane cafe penalised $170k for paying workers in food, drink

A court has condemned the Brisbane cafe’s conduct as belonging “in the dark ages”.

Cafe 63 at Racecourse Rd, in Hamilton Central, Brisbane, has been penalised for underpaying workers and partially paying them in food and drink. Picture: Supplied

A Brisbane cafe has been penalised $170,000 for underpaying workers and partially paying them in food and drink, with a court condemning the conduct as “abhorrent” and belonging “in the dark ages”.

The Federal Circuit Court imposed a penalty of $130,000 against 63 Racecourse Rd Pty Ltd, which operated a cafe trading as ‘Café 63 Racecourse Rd’ in Hamilton Central. The company’s sole director and shareholder, Hamish Russell Watson, was penalised $40,000.

The company underpaid 33 employees, mostly visa holders working as cooks, kitchen attendants and food and beverage attendants a total of $36,653.

Employees were also paid flat hourly rates and allowances under individual flexibility agreements instead of the penalty rates and overtime rates that apply under the award.

One of the ‘allowances’ was the right to eat meals and drink beverages up to the value of $35 per day, leading the company to breach its obligation under the Fair Work Act to pay employees in money.

Federal Circuit Court judge Michael Jarrett cited a previous judgment that found paying employees with food or drink was a practice that “belongs in the dark ages”.

He said if the Cafe 63 workers did not take advantage of the meal allowance, they were not entitled to receive the unclaimed component as cash.

“Such an arrangement was and is abhorrent and serves only to promote the employer’s advantage,” he said.

The company also breached workplace laws relating to various requirements that must be met when entering into IFAs, including failing to detail how individual employees would be better off overall than under the award and, for some IFAs, failing to record the agreement in writing.

Judge Jarrett said the approach to the IFAs was a “complete affront to the integrity of awards as an industrial safety net for employees”.

“The evidence demonstrates that the respondents used the opportunity to employ individual flexibility arrangements to avoid the protections offered to the first respondent’s employees by the restaurant award,” he said.

“No attention was paid to whether the particular employees would be better off overall under the individual flexibility arrangements. 18 of the 32 employees subject to such arrangements were not provided with a written proposal (as required) and the arrangements were not recorded in writing.

“I accept that not providing employees with a written proposal or record of the bargain again undermines the individual flexibility arrangements scheme established by the Fair Work Act.”

Fair Work Ombudsman Sandra Parker said $170,000 in penalties made clear paying flat rates that undercut award entitlements, and failing to follow the important laws for individual flexibility arrangements or part-time agreements would 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. Anyone with concerns about their pay or entitlements should contact us,” Ms Parker said.

Judge Jarrett said the breaches occurred despite Mr Watson having previously received information from the ombudsman “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,” he said.

The ombudsman investigated 63 Racecourse Rd Pty Ltd after receiving anonymous reports. The company made back payments last year.