The Fair Work Ombudsman has commenced court proceedings against a the operator of a Melbourne burger bar for the second time over allegations of staff underpayment and this time is seeking an injunction to stop him underpaying employees in future.
The Ombudsman has begun legal action against Todd Buzza, the operator of Brunswick restaurant Burger Buzz, over a $7513 underpayment of five employees between December 2015 and July 2016. Two of the workers were only 19, and one was on a 417 working holiday visa.
The Ombudsman launched proceedings against the company for a similar underpayment case at the beginning of 2016. At that time, the Ombudsman alleged Buzza had underpaid seven former employees a total of $7113. Four of those employees were also on 417 visas.
In both situations, the workers were allegedly underpaid for short periods of time ranging from two to six weeks. In the latest case, one worked claimed they were paid nothing at all for their work.
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On top of the underpayment allegations, the Ombudsman also claims Buzza and his company, Rum Runner Trading Pty Ltd, knowingly provided the Ombudsman with false and misleading records and failed to provide employment records.
Acting Fair Work Ombudsman Michael Campbell said in a statement that Buzza’s business had been the subject of multiple underpayment allegations from employees, with inspectors advising him of minimum pay obligations on two occasions in 2014.
“We are concerned that the allegations made by a series of workers suggest a pattern of non-compliant behaviour and a business model based on the exploitation of vulnerable workers,” Campbell said.
Both Buzza and his company face possible penalties of up to $10,800 and $54,000 per contravention, respectively. The Ombudsman is also seeking a court order for the business to pay back the employees in full, along with an injunction to prevent Buzza from underpaying employees in the future.
An injunction would mean that if Buzza was proven to underpay workers again, he could face contempt of court proceedings.
Injunction request “extremely unusual”
Peta Tumpey, an employment lawyer at TressCox Lawyers, told SmartCompany the Ombudsman’s request for an injunction is “extremely unusual”.
“If an injunction is granted, he would be liable for contempt of court, and a result of that can be jail time,” she says.
“To my knowledge, it would be the first time a business owner has a threat of a jail sentence over underpaying workers, I don’t believe it has happened before.
“It’s clear that this man has had ample opportunities to get his house in order and correct his practices. He’s the first entity to push the Fair Work Ombudsman to the point where they can justify these actions.
“It’s clear they want him to be held more accountable, rather than just issuing repayment orders and penalties.”
Granting the injunction would be a “really big eye opener” for other businesses, and would further drive home the importance of complying with workplace law, says Tumpey.
“For businesses out there running close to the line and taking risks, this should be a wake-up call,” Tumpey says.
Along with allegations of underpayment and falsification of records, the Ombudsman alleges Buzza also failed to comply with pay slip and meal break workplace legislation.
Tumpey reminds businesses it is compulsory to issue pay slips for each pay cycle and warns fines are dealt out per breach, rather than per employee.
“As for meal breaks, it varies between awards but the general rule is that workers are entitled to 30 minutes of an unpaid meal break for every five hours worked,” she says.
“Don’t try to be smart”
Business owners are advised that vigilance and compliance are best practice when it comes to dealing with the Fair Work Ombudsman.
“If you get an enquiry from a worker or the Fair Work Ombudsman it should set off alarm bells to make sure everything is in order,” Tumpey says.
“And if you do get ordered to provide records, just comply and work through it with them, you might only be told off. Don’t try to be smart.”
SmartCompany contacted Buzza’s business, Burger Buzz, but did not receive a response prior to publication.