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Café franchisee repeat offends, hit with $230k in fines

Adrian Flores
Adrian Flores
16 November 2020 1 minute readShare
Café franchisee repeat offends

A former café franchisee has been penalised $230,000 by the Federal Circuit Court for underpayments of vulnerable workers despite having previously faced the court for similar conduct.

The Federal Circuit Court ordered Tac Pham Pty Ltd, the former franchisee of the Han’s Café Rockingham outlet in Perth, to pay penalties of $191,646. Further, the former general manager of the outlet, Cuc Thi Thu Pham, has been ordered to pay $38,394.

The company and Ms Pham breached payslip laws and underpaid 11 employees — including a number of young and migrant workers — a total of $5,111 between October 2017 and April 2018.

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The employees were back-paid only after the Fair Work Ombudsman commenced its latest investigation.

Three of the contraventions — relating to failures to provide required information within payslips and underpayment of both adult and junior minimum wages — met the definition of “serious contraventions” under the Protecting Vulnerable Workers laws because of the repeat offending.

 

Under the laws, which came into effect in September 2017, the maximum penalties for serious contraventions are $630,000 per breach for a company and $126,000 for an individual, 10 times the penalties which would ordinarily apply.

Judge Christopher Kendall said the latest litigation revealed the extent of the non-compliance by the respondents had increased, despite commitments from Ms Pham during the earlier court proceedings to improve her payroll practices.

“The respondents had no intention of changing their conduct and would have continued as they had been if the [Fair Work Ombudsman] had not intervened when it did. The fact that the respondents did not take steps to engage an external [payroll] consultant for over one year after they had said they would do so and only in response to the [FWO]’s investigation is, again, entirely unsatisfactory,” Judge Kendall said.

“Importantly, the respondents failed to comply with the most basic obligations owed to employees. Their conduct reflects a cavalier and entirely unacceptable approach to core legal obligations.

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“Some employees were more vulnerable than others, and in an industry which has a high number of junior employees, the need to ensure that the rights and entitlements of those more vulnerable are met is particularly high. Employers must be deterred from engaging in similar conduct.”

Fair Work Ombudsman Sandra Parker said the new judgment highlighted the value of the serious contraventions powers, saying repeat offending is “simply unacceptable”.

“We will continue to make full use of the Protecting Vulnerable Workers laws to ensure that any individuals or companies who commit serious contraventions are held to account and understand the consequences of their failures,” Ms Parker said.

Café franchisee repeat offends, hit with $230k in fines
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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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