Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Two franchisees hit with fines worth $80,000

Adam Zuchetti
Adam Zuchetti
22 March 2018 1 minute readShare
Gavel, judge, verdict

A substantial wage shortfall affecting 49 employees has seen two franchisees within the same food business slapped with fines collectively worth almost $80,000 – well short of the maximum penalties they faced.

The operators of the Armadale and Rockingham outlets of Han’s Café in Perth were found to have collectively underpaid their workforce by almost $100,000.

In the Federal Court in Perth, the operator of the Armadale outlet, Phua and Foo, was found to have withheld $67,161 in payments to 27 employees. Tac Pham, the operator of the Rockingham outlet, was found guilty of underpaying 22 workers to the tune of $27,920.

Affected workers were paid flat rates, which fell short of the relevant award wages.

The businesses were fined $35,000 and $37,500 respectively, with the court noting that the actions appeared to be deliberate, given both business owners were aware of the award rates and their obligations as employers.

Despite having less underpaid workers, the operator of the Rockingham outlet attracted a higher penalty as it had been previously warned by the Fair Work Ombudsman against wage underpayment.

Its general manager, Cuc Thi Thu Pham, received an additional penalty of $7,500 for her role in the underpayments.

The judge said Mrs Pham “simply chose to disregard her dealings with the FWO in November 2013 and continued to operate the defective wages payment system which she had inherited, recklessly indifferent as to whether she was, thereby, compliant with the Restaurant Award conditions.”

Meanwhile Phua and Foo’s penalty was much lighter than it could have been, given that it faced penalties of as much as $1.45 million.

“Employers have a lawful responsibility to ensure they are aware of the minimum wage rates and entitlements that apply and that they pay them in full to all employees,” Fair Work Ombudsman Natalie James said.

“We go to great lengths to promote compliance in Australian workplaces and claiming ignorance of workplace laws is no excuse.

“We appreciate that employers from culturally and linguistically diverse backgrounds face challenges in navigating Australia’s workplace laws.

“However, it is not acceptable for employers to fail to make a reasonable effort to determine the correct pay rates for their staff.

Two franchisees hit with fines worth $80,000
mybusiness logo
Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?