People & Human Resources

Fair Work Ombudsman recovers $470,000 in lost wages after crackdown reveals widespread restaurant non-compliance

Dominic Powell /

A blitz by Australia’s Fair Work Ombudsman on three of Australia’s most popular food precincts has resulted in a whopping $471,904 in recovered wages for over 600 workers.

Investigations at 243 businesses on Melbourne’s Victoria Street, Glebe Point Road in Sydney, and Fortitude Valley in Brisbane revealed that 72% of the businesses investigated had breached workplace law.

Of the breaches, 38% related to underpaying workers hourly rates, and 28% related to inadequate or non-existent payment and employment records. The FWO said in a statement that issues around not providing meal breaks and incorrectly classifying workers were also common.

Further breaking down the precincts, the FWO found that businesses at Victoria Street were more likely to be non-compliant at a rate of 80%, and businesses at Fortitude Valley had the lowest rate of non-compliance at 60%. Seventy-one on-the-spot fines were issued, and 63 caution notices were also issued to businesses in the areas.

“While disappointed by the high levels of non-compliance uncovered in the sample of businesses audited, we are not surprised. One in ten disputes resolved by the FWO last financial year involved a restaurant, café or takeaway food outlet, and nearly one third of the most serious cases that we take to court involve this sector,” outgoing Fair Work Ombudsman Natalie James said.

“Our experience is that addressing entrenched, cultural non-compliance requires a combination of regulatory intervention, public awareness and industry leadership.”

“This is an industry-wide problem and it needs an industry-wide response. There are over 50,000 cafes, restaurants and takeaway outlets in Australia and the FWO cannot fix this one café at a time.”

Legal action was also taken against one of the businesses in the precincts, Meatball and Wine Bar, with the FWO taking the restaurant chain to court last year over allegations 26 employees were underpaid $14,000.

At the time, director at law firm Workplace Law Shane Koelmeyer told SmartCompany SMEs in the hospitality sector needed to be vigilant when it came to compliance as the FWO had picked the industry as an interest area.

“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 said at the time.

“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].”

NOW READ: Worker wins $30,000 in compensation after being wrongfully accused of stealing $7,000 in long service leave

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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