Ali Baba and the $136,000 fine: Former kebab shop owners get served for underpaying foreign worker
The former owners of an Ali Baba kebab chain store have been fined $136,000 and forced to back-pay a worker over $50,000, in yet another case of a foreign worker being underpaid in the hospitality industry.
The former owner of the store, Younus Mohammed, has been fined $22,000 and his brother Mahmood Mohammed, who managed the shop, has also been ordered to pay $14,000. The two brothers operated the store in the Southland shopping centre in the Melbourne suburb of Cheltenham.
The employee, an Indian national, was not paid any wages for his first three months despite working 70 hours a week and was then paid a flat rate of only $290 a week when legally he was entitled to be paid more than $1,000 a week.
The case was heard in the Federal Magistrates Court following prosecution by the Fair Work Ombudsman.
Workplace laws regarding appropriate meal breaks and keeping employment records were also breached.
Recently the FWO has been cracking down on the treatment of foreign workers in the hospitality industry.
Last week, the FWO audited 21 Sydney restaurants which employed 150 workers and is now investigating 16 of those restaurants following a series of complaints.
Fair Work Ombudsman Nicholas Wilson said in a statement the court's decision sends the message underpayment of vulnerable foreign workers is a serious matter.
"Foreign workers can be particularly vulnerable because they may not be fully aware of their workplace rights and are often reluctant to complain, so we place a high priority on taking action to protect them.
"Successful prosecutions such as this also benefit employers who are complying with workplace laws because it helps them to compete on a level playing field," he says.
Partner at M + K Lawyers, Andrew Douglas, told SmartCompany this was a serious case of underpayment.
"These fines are substantial. I guess the most important thing about this, is that the people who make the decisions to underpay their staff will be held personally liable," he says.
Workplace law expert Peter Vitale agreed, telling SmartCompany the FWO will prosecute individuals and not just the companies.
"The fines are significant against both the company and the individual. It illustrates the willingness of the ombudsman to go after individual directors who are involved in the breaches so having a company structure to employ people will not necessarily protect you if you are breaching the Fair Work Act," he says.
Douglas says current workplace laws are decades behind current industry standards and the laws make it difficult for employers because of inflexible working conditions.
"I think there is no doubt the hospitality industry is punished by the award conditions. People now expect that they will have to work weekends and nights.
"The laws were created in the 1960s and 70s when it was a nine-to-five working week and business operating hours these days have changed to meet consumer demand, and the laws need to be changed to match this," he says.
Vitale says making a profit in the hospitality industry is notoriously difficult because of the strict workplace laws.
"The awards are fundamentally entrenched in another era. I don't think they're catching up at all, they remain rooted in the past and it needs to be changed. It's very hard from the perspective of the employers. They work in an industry where it's very hard to control costs and make a profit," he says.