Allegations of blatant discrimination against employees of foreign descent has landed a franchisee in court, where the business and its director face the prospect of massive financial penalties.
The matter will be heard in the Federal Circuit Court after the Fair Work Ombudsman (FWO) raised the allegations against QHA Foods and its directors Anandh Kumarasamy and Haridas Raghuram, who operate the Crust Gourmet Pizza Bar in North Hobart.
According to the FWO, QHA and its directors actively discriminated against three Bangladeshi and an Indian national by paying them substantially lower rates than Australian employees.
The four employees – hired to undertake a range of duties including food preparation, serving customers, store cleaning and making delivery runs – were allegedly paid flat rates of $12 an hour, plus an extra $1 for every delivery made.
That amounted to significant wage underpayments compared with the relevant industry award, the FWO said.
But the fact that Australian employees at the same company were paid higher hourly rates as well as mandated penalty rates and other entitlements amounts to blatant discrimination on the basis of nationality in direct breach of the Fair Work Act, the regulator said.
Pay slips and electronic payment into bank accounts were also conducted for Australian employees but not for the impacted foreign staff members, the FWO said.
Yet even some Australian employees were allegedly underpaid by a combined $6,252 after some provisions of the award were incorrectly applied.
“We allege that four migrant workers were paid significantly less than other staff at a Crust pizza franchisee because they were not Australian. Migrant workers have the same rights and entitlements as Australian workers and must be paid according to our national awards,” ombudsman Sandra Parker said.
If convicted, QHA faces penalties of up $54,000 for every breach of the law, while Mr Kumarasamy and Mr Raghuram each face personal fines of up to $10,800 per breach.
It marks just the second time that the FWO has taken action against an employer for alleged discrimination on the basis of nationality.
Ms Parker noted that compliance with the correct payment of migrant workers is being prioritised by the agency because “they can be particularly vulnerable in the workplace and reluctant to complain”.
Retail Food Group – owner of the Crust brand – did not respond to My Business’ request for comment.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.