Subway Franchises Stung for Underpayment

Published October 03, 2019 (last updated July 22, 2020)

After a lengthy investigation as a result of anonymous tip offs and requests for assistance, the Fair Work Ombudsman has recovered over $81,000 in unpaid wages for 167 current and past employees from 22 different Subway franchises.

Subway franchises in New South Wales, Queensland and Victoria were targeted by Fair Work Inspectors who interviewed employees, managers and franchise owners and looked at a number of payslips and records.

The Ombudsman found that 18 of the 22 franchises investigated were in breach of Australian workplace laws and issued nine on the spot fines.

Those breaches included Subway failing to pay employees minimum wage, casual loadings, holiday and overtime rates, and did not issue payslips or employment records in place.

The Fair Work Ombudsman have recovered close to $150,000 for underpaid employees at the sandwich franchise over the past two financial years and said they will continue to assist Subway employees.

“The Fair Work Ombudsman is very concerned by the rates of non-compliance we have seen in the Subway franchise network and has a number of ongoing lines of enquiry into their operations.

“Half of the underpaid Subway employees were young workers or from a migrant background, which can make them particularly vulnerable to exploitation.

“For many of these workers, it might be their first job and the could be unaware of their workplace rights or be scared to raise issues with their boss,” Fair Work Ombudsman Sandra Parker said.

The investigation into the Subway stores is part of a long string of franchises in Australia that have been found underpaying their staff.

Recently Wesfarmers admitted to underpaying workers by an estimated $15 million after a decade worth of payroll errors.

As the number of businesses who are found to underpay employees increases and more pressure is put on employers correctly paying staff, it is important to be fully aware of Australia’s minimum wage, as well as the wage rates within different industries and most importantly, to comply with them.

It is the responsibility of the employer to understand penalty rates in accordance to the Modern Award or Enterprise Agreement and whether they apply to their employees. Penalty rates are compensated to workers for working shifts such as early mornings, late nights, weekends or public holidays.

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