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Major city food precincts rife with worker exploitation

Adrian Flores
Adrian Flores
04 September 2020 1 minute readShare
Major city food precincts rife with worker exploitation

Popular food precincts in two capital cities have been the source of widespread breaches in workplace laws, in particular against young workers such as university students, an investigation has found.

An investigation from the Fair Work Ombudsman recovered $1,212,727 in unpaid wages for 1,351 workers in the fast food, restaurant, café and retail sectors between December 2018 and March 2020, prior to the COVID-19 pandemic.

Inspectors investigated 49 fast food, café and restaurant businesses in Melbourne’s Degraves Street and Hardware Lane, while in Brisbane’s West End, inspectors investigated a total of 44 businesses.

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The audits found that 84 per cent of businesses investigated in the Melbourne laneways food precincts and 88 per cent of those investigated in Brisbane’s West End were not compliant with Australia’s workplace laws.

The most common contraventions across the investigations were failures to correctly pay penalty rates, followed by underpayments of the minimum hourly wage.

 

In total, the regulator recovered $194,365 for 186 Melbourne laneways workers and $309,073 for 369 Brisbane West End workers. Total underpayments per business ranged from $30 to $59,680 in Melbourne and $377 to $65,215 in Brisbane.

The FWO’s national food and retail investigations also assessed another 171 businesses, finding a 71 per cent non-compliance rate, with inspectors recovering $709,289 for 796 workers. These workers were engaged in roles such as chefs, cooks, waiters and retail assistants.

In response, the FWO issued 11 contravention letters, 10 formal cautions, 16 infringement notices (with total penalties of $31,290) and 85 compliance notices.

The most common reason given for non-compliance was lack of awareness of all workplace obligations (64 per cent across Melbourne and Brisbane, 51 per cent in national investigations).

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Fair Work Ombudsman Sandra Parker said the low rates of compliance were unacceptable.

“While we know some of our priority sectors, including many fast food, restaurant and café businesses, have been seriously impacted by the COVID-19 pandemic and are under considerable financial strain, we will continue to enforce workplace laws in a proportionate way,” Ms Parker said.

“We will focus on ensuring that any underpayments of workers are back-paid promptly, and where serious non-compliance is found, we will take enforcement action.

“Competitive dining strips commonly rely on workers who are young, students or visa holders. We will continue to protect such vulnerable employees by holding employers to account.”

Major city food precincts rife with worker exploitation
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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