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Restaurant Group Owes Workers $7.8m

news
18/7/2019

By Nicholas Hartman

A large restaurant group in Melbourne has back-paid workers $7.8 million in wages, entitlements and superannuation, after a Fair Work Ombudsman investigation uncovered non-compliance.

MADE establishment, which operates five restaurants in Melbourne, has entered into a court-enforceable undertaking (EU) with the Fair Work Ombudsman (FWO) after admitting it underpaid 524 workers between 2011 and 2017.

A four year investigation by the FWO uncovered many breaches of the Fair Work Act, including failure to pay minimum award rates, penalty rates, casual loadings, overtime rates, split-shift allowances and annual leave loadings.

Some staff were also not classified correctly, as they should be under the Restaurant Industry award. MADE also admitted to not keeping their payslip records compliant.

The FWO Sandra Parker said the EU would ensure MADE’s compliance with the Fair Work Act, going forward.

“The Court-Enforceable Undertaking commits MADE Establishment to stringent measures to ensure that current and future employees across their restaurant group are paid correctly,” Ms Parker said.

“MADE’s massive back-payment bill should serve as a warning to all employers that if they don’t get workplace compliance right from the beginning, they can spend years cleaning up the mess.”

On top of the backpayment, MADE must make a $200,000 payment to the Consolidated Revenue Fund. MADE’s owner, celebrity chef George Calombaris, has also been ordered to undertake speaking engagements to educate the restaurant industry on the importance of workplace compliance.

According to The Age, the FWO has recently announced it is looking into the restaurants owned by other celebrity chefs such as Neil Perry, Guillaume Brahimi, Teage Ezard and Heston Blumenthal.

“The Fair Work Ombudsman is cracking down on underpayments in the Fast Food, Restaurant and Café sector, and we urge employers to check if they are paying their staff correctly,” Ms Parker said.

Employsure’s Commercial Director, Steve Hoyle, said this case shows that money “saved” from non-compliance is a fantasy.

“When you do get caught and found non-compliant with the complex maze of Fair Work laws and regulations, it is not pretty,” Hoyle said.

“I urge all businesses to become compliant with Fair Work laws. The worst case I’ve come across in non-compliance is a farmer in South Australia who ended up with costs 1100% of what he saved in underpayments.”

Hoyle added that he understands the pressures of SMEs all too well but ensuring compliance with Fair Work is a must.

“There’s an uncomfortable truth about workplace relations in Australia; if large businesses, can’t get pay rates right, then how does Australia expect medium and small businesses to?

“There’s a lot of work to be done in this area, and I believe Employsure can help businesses navigate their way to compliance.”