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Wages traded for soft-drink and pizza



Franchising | News | Small Business | Staff

By Joe Kelly

The operators of two Melbourne restaurants have been fined $334,818 for trading the wages of teenage employees for soft drink and pizza.

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.

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