Federal Circuit Judge John O’Sullivan slammed the “dark ages” practice and noted that Tecoma man Ruby Chand, who owned both franchises, had a history of underpaying employees.
The underpayments took place between 2009-2012 at two La Porchetta franchise outlets. The Fair Work Ombudsman found that 111 mostly teenage employees, including one as young as 13, had been underpaid a total of $258,000.
The FWO investigation was triggered by a complaint by the parent of one young staff member. The investigation subsequently found that 59 employees at an outlet in Pakenham had been underpaid a total of $130,195. A further 52 employees at an outlet in Berwick had been short-changed $127,824.
The Court heard that Chand had claimed the employees were given half-priced pizza and soft drink, which was being ‘offset’ against their wages and entitlements.
Underpayments to individual workers ranged from $3 to $25,358 while some workers employed under programs allowed Chand to claim more than $45,000 in government benefits.
The two companies that owned the restaurants were each fined $139,507.50 with Judge O’Sullivan noting that Chand’s companies had previously been required to back-pay employees in 2007, 2008 and 2009. Mr Chand was further penalised with a fine of $55,803.
“I am not convinced the respondents are genuinely remorseful,” Judge O’Sullivan said. “I am satisfied that the conduct engaged in by the respondents was part of a systematic business practice.”
The affected workers were serving in part-time and casual positions and were employed as cooks, kitchen attendants and in service positions.
Fair Work Ombudsman Natalie James said the imposition of tough penalties by the court sent a strong message to other businesses that exploitation of teenage workers would not be tolerated.