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

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A 24-hour cafe in Melbourne’s Crown Casino has been fined $217,000 for repeated breaches of the Fair Work Act, including underpaying 54 workers a combined $73,347.

The Federal Circuit Court has penalised Ital One Holdings, which owns Cafe Baci at Southbank, for breaches in 2015 and 2016, as well as the director of the company, who was fined a further $40,000.

The ruling is the second major financial penalty the Fair Work Ombudsman (FWO) has secured so far in 2019 in what is expected to be a busy year for Fair Work Act compliance activity.

The cafe was taken to court by the FWO in 2017, alleged to have paid flat hourly rates varying from $16 to $48 which led to underpayment of various entitlements, including minimum wage rates, overtime, casual loading and penalty rates.

The underpayments are understood to have been rectified but the breaches occurred after the FWO warned the business about compliance with minimum wage and penalty rates multiple times since 2007, including during 12 previous investigations.

The FWO also assisted three former Cafe Baci workers who took their own action against the business in the small claims division of the Federal Court in 2014, resulting in $32,000 of back payments.

Cafe Baci’s history of non-compliance was a key reason the FWO decided to commence legal action, while Judge Heather Riley said the business owner’s conduct was “egregious”.

“[T]he [company] had been found by this court to have broken workplace laws in substantially similar ways on three previous occasions in the recent past. The respondents have shown no remorse, but sought to minimise their behaviour with complaints of being busy,” Riley said.

“It is incumbent on anyone running a business, no matter how busy it is or how many staff it has, to ascertain the correct rates of pay for employees and have systems in place to ensure that the correct rates of pay are paid.”

As many as 25 of the underpaid workers were visa holders from countries including France, Italy and India, mainly on student and 417 working holiday visas.

Ombudsman Sandra Parker highlighted the seriousness of underpaying migrant workers.

“All workers in Australia have the same rights at work, regardless of citizenship, and we will continue to take businesses who underpay migrant workers to court. We have an agreement with the Department of Home Affairs where visa holders can contact us for help without fear of their visa being cancelled,” she said in a statement.

SmartCompany contacted Cafe Baci and its director for comment but did not receive a response prior to publication.

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