Retail

Subway franchisee fined $65,000 for paying worker $14 an hour

Matthew Elmas /

Subway

Workers make sandwiches at a Subway franchise in Seattle on February 25, 2016. Source: AP/Ted Warren.

A former Subway franchisee who operated two outlets in Sydney has been fined $65,000 for paying a worker on a flat rate as low as $14 an hour.

The Federal Circuit Court found the franchisee underpaid a Chinese visa worker $16,345 between 2014 and 2016.

Interestingly, a special clothing allowance was also underpaid, the Court found.

Under the Fast Food Industry Award, the worker was entitled to a minimum hourly rate of over $18, plus casual loading and penalty rates of up to $52.22 on public holidays.

However, the worker was paid just $14 to $14.50 an hour as a flat rate.

The Court heard Fair Work inspector Kristen Walsh rejected a request from the business owner to consider part of the worker’s employment period as part-time rather than casual.

Walsh asked the business owner to go to the bank for a loan in order to repay the worker in 2017, which she did with an initial instalment of $5,000.

The Fair Work Ombudsman (FWO) alleged there were 11 separate contraventions of the Fair Work Act in its case, nine of which were subject to a maximum penalty of $54,000 and two which carried a maximum $27,000 fine.

The FWO sought penalties of between $128,520 and $185,595 for the business and a fine of between $32,130 and $41,310 for the employer.

The employer argued the 11 contraventions should be separated into two groups, underpayment of money (including various penalty rates) and administrative defaults, including failure to keep records and issue payslips.

However, Judge Baird didn’t agree.

“The penalty should send a message to fast food businesses that compliance in the workplace is not an option — it’s the law. Every worker in Australia has the same workplace rights and we encourage anyone with concerns to contact the Fair Work Ombudsman,” fair work ombudsman Sandra Parker said in a statement on Monday.

The worker was a casual food attendant aged in her late-20s on a skilled nominated visa.

Judge Julia Baird said ensuring compliance with minimum employment standards was an important factor in the degree of penalty served by the Court.

NOW READ: Melbourne cafe fined $217,000 for underpaying more than 50 different workers

NOW READ: ‘Loophole closed’: Business will have to prove it didn’t underpay workers in unprecedented case

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

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