The Fair Work Ombudsman has launched Federal Circuit Court action against well-known Melbourne restaurant chain Meatball and Wine Bar and its director over allegations that 26 employees were underpaid $14,000.
However, the business says it immediately rectified some pay ‘irregularities’ discovered in 2016.
The Ombudsman said this morning it is pursuing the company and its sole director, Matteo Bruno, over allegations that 26 workers in the chain’s three restaurants, located in the Melbourne CBD, Richmond and Collingwood, were paid flat rates of between $17.31 and $21.69 per hour, amounting to $14,149 in underpayments between July and October last year.
All but four of the workers were in their 20s, and the Ombudsman claims 10 were on working holiday visas.
When contacted by SmartCompany, a spokesperson for Meatball and Wine Bar said no employees had been disadvantaged by “some pay irregularities” that were discovered in 2016.
“They were immediately remedied and systems were put in place to ensure it would not happen again. No employees have been disadvantaged by this and [the business] continues to be fully compliant with the Industry Award and thanks all its employees for their ongoing support,” the spokesperson said.
The Fair Work Ombudsman alleges that by paying workers flat rates, it did not pay correct minimum wages, overtime rates and penalty rates for late night and weekend work to workers as required under the Restaurant Industry Award 2010.
The watchdog also alleges that the company’s director had received “comprehensive pay and conditions guides” from a private employment adviser and was aware of the correct entitlements for these workers.
“It is simply unacceptable for an employer to underpay workers after being directly advised on their obligations to meet minimum employee pay rates,” Fair Work Ombudsman Natalie James said in a statement.
The case is set for a directions hearing on September 19. Bruno faces a possible penalty of $10,800 per contravention if found to be in breach of the Fair Work Act, while the company faces possible penalties of up to $54,000 per contravention.
From hospitality to retail, the Ombudsman is focused on young people
Employment lawyer Peter Vitale says the allegations in this case highlight the importance of following through on any advice received if a business engages a third party to advise on payment obligations.
“The key here is really the claim the employer is alleged to have disregarded the advice they were given — and if you are going to go to the trouble of getting advice about entitlements, you must follow through,” he says.
Vitale says there’s no denying the hospitality sector remains an area of focus for the Fair Work Ombudsman, given previous findings that compliance has been “a bit loose” in the area.
“If you’re in that industry and employing anyone, it makes it even more important as it ever was to understand your obligations,” he advises.
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Shane Koelmeyer, a director at law firm Workplace Law, says it’s now easier than ever to find advice on what your payment obligations are. He reminds businesses that should the Ombudsman’s office review your paperwork, it will be asking how a business worked out what to pay people in the first place.
He says the Ombudsman is interested in hospitality and retail because of the prevalence of vulnerable workers in those areas.
“They’re asking, ‘where are our most vulnerable workers?’ So if you’re working in a space with people who are new to the workforce or unfamiliar to the Australian workforce, consider this,” he says.
Business owners should be getting across the awards that cover their businesses as soon as possible, Koelmeyer says, because too often a business starts as a one-person operation and then grows without consideration for broader workplace laws.
“A lot of small businesses are starting up as me, a person in a garage or in their study at home. Then they just start putting a casual on, a part-timer on, and they grow without considering this [the awards],” he says.