Daiso franchisee with repeat underpayment breaches forced to put ad in the Herald Sun explaining conduct

A retail franchise found to have underpaid young workers on more than one occasion has entered into an enforceable undertaking with the Fair Work Ombudsman that will see it place an ad in Melbourne’s Herald Sun newspaper, explaining its contravention of the law and promising not to do it again.

Daiso Australia and Mei King Hii, the director of Melbourne’s Midtown Plaza Daiso franchise, have also agreed to donate $5000 to a young person legal rights centre called Youthlaw, back-pay all outstanding entitlements and take steps to locate and reimburse former employees.

Daiso is a Japanese retail franchise that sells every item in store for $2.80 and operates five stores in Melbourne.

The ombudsman found the Midtown Plaza franchise had underpaid 27 staff almost $40,000 in just three months.

Most of the workers were Vietnamese, Korean, Chinese and Japanese students or backpackers on 417 working holiday visas, aged between 19 and 26.

The store had first come to the watchdog’s attention in 2012, after three employees complained they were underpaid and a resulting investigation found they had been short-changed almost $12,000.

Fair Work inspectors and union representatives had met with King Hii at the time to discuss her obligations under workplace laws.

However, the ombudsman continued to receive complaints from workers and a follow-up investigation revealed 27 further staff had been underpaid a total of $37,983 between September and November 2012.

They were underpaid their minimum hourly rates, penalty rates, annual leave loading and double-time when rest breaks between shifts were less than 12 hours.

King Hii and Daiso Australia entered into the enforceable undertaking as an alternative to litigation.

In addition to the repayments, the Herald Sun ad and the donation, both agreed to provide a report for the ombudsman on steps taken to ensure they will in future meet their obligations and post a notice in the Midtown Plaza shop advising other employees of its contraventions and giving a commitment such behaviour would not happen again.

Fair Work Ombudsman Natalie James said in statement when employers with contraventions are given advice and assistance, they are expected to follow it.

“Obviously we frown upon employers who refuse to fix problems or continually ignore advice so they have a competitive advantage over others doing the right thing,” said James.

TressCox partner Rachel Drew told SmartCompany there are advantages to entering into an enforceable undertaking with the Fair Work Ombudsman, including avoiding further penalties and a court record of the breach of workplace law.

“They are not easy to get,” says Drew, pointing out enforceable undertakings require a great deal of negotiation between the employer and the Ombudsman.

Drew says while some of the agreements in this case were slightly unusual, especially the newspaper ad, every enforceable undertaking is different and tailored to the workplace and the contraventions.

“The public humiliation is a little bit unusual,” says Drew.

“Given Fair Work publishes the details on their own website, requiring someone to put in ad in the newspaper is a bit unusual.”

But Drew says the ad may be to aid in locating employees who were underpaid.

She says donations are a typical agreement in an enforceable undertaking and, in the case, the donation to a youth law program was applicable because the contraventions were against young people.

Daiso was contacted for comment but SmartCompany did not receive a response prior to publication.


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