The operator of a former Gloria Jean’s coffee shop in Sydney’s Kings Cross has paid $2000 in compensation to a worker who was sacked after she queried her pay rate.
The payment is part of an enforceable undertaking the franchisee entered into with the Fair Work Ombudsman to avoid litigation, and follows recent court action taken by the watchdog against one of Gloria Jean’s Melbourne franchisees over $83,000 in underpayments.
Senan Pty Ltd, the company that operated the Gloria Jean’s franchise at the Kings Cross Shopping Centre, was also forced to issue a written apology to the young, casual employee it dismissed in June last year after she questioned her $12 an hour pay rate.
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The employee, a 26-year-old foreign worker in Australia on a skilled graduate visa, had asked Senan director Elaine (Lie Ming) Zhou if the flat rate of $12 an hour she was being paid for all hours of work was the correct rate.
Two days later, Zhou cancelled the employee’s next rostered shift and terminated her employment via email.
When the employee took her complaint to the Fair Work Ombudsman, the watchdog found Senan contravened the Fair Work Act when it cancelled her rostered shift and dismissed her for querying employment conditions.
A subsequent investigation found Senan had underpaid another 15 other staff more than $16,000 between June 2011 and July 2013, including one employee who was owed more than $8000 back-pay, and had failed to keep proper employment records.
The company had underpaid staff, mostly aged between 17 and 20, on their minimum rate of pay, casual loadings, weekend penalty rates and payment of accrued entitlements on termination.
Senan agreed to pay the employee $2000 in compensation for economic and non-economic losses suffered as a consequence of the adverse action, and to write to all affected employees offering its “sincere regret”.
Zhou was also required to undertake workplace relations training on the rights and responsibilities of employers.
Although Senan no longer owns the Gloria Jean’s franchise, the company’s head office issued a statement to SmartCompany saying the company has training programs and systems in place to support franchisees in running their businesses.
“However each franchise partner is responsible to ensure that their business complies with all applicable laws under the franchise agreement, which includes compliance with employment law, the Fair Work Act and all relevant employment awards.”
Fair Work Ombudsman Natalie James said the case should serve as a reminder to all employers that employees have a lawful right to question their workplace entitlements.
M+K Lawyers partner Andrew Douglas told SmartCompany that when an employee has a workplace right, they also have an entitlement to raise issues about that workplace right.
“Importantly, it doesn’t matter if it’s a formal complaint,” says Douglas. “The mere act of raising the right is protected under an adverse action.”
According to Douglas, while the employee would have had difficulties standing up an unfair dismissal claim because she was employed casually, it wouldn’t have stopped her making a costly unfair dismissal case against the company.
Douglas says any breach of an enforceable undertaking is taken very seriously, and an employer should always comply with the watchdog when they’ve done the wrong thing.
“The Ombudsman is not a big bogie. If you make proper admissions, they will basically support an employer so long as they behave appropriately,” he says.
Douglas says employees who resist and try to fight the Ombudsman when they know they’re at fault will find that’s when they will land themselves in court.
“If you made a mistake and it’s lodged with Fair Work, make a full admission and move forward. It’s not going to cost you any more than what you owe,” he says.
Senan could not be reached by SmartCompany prior to publication.