The franchisee of a popular eatery is facing fines and costs in the order of $1.5 million as legal action is taken for staff underpayments, despite the workers having already been repaid.
Phua and Foo Pty Ltd, franchisee of the Han’s Cafe outlet in the Perth suburb of Armadale, is being taken to court by the Fair Work Ombudsman (FWO), as the regulator continues its crackdown on the underpayment of worker entitlements.
FWO is alleging the company underpaid 27 staff by $67,161.51 over the nine months to September 2015 through the use of flat rates, which were below the industry award, and ignored the provision of penalty rates and casual loadings.
Despite having back-paid the affected workers earlier this year, FWO is pushing ahead with legal action to enforce penalties for the breaches as well as to enforce the business to commission workplace relations training for managerial staff.
If found guilty, Phua and Foo faces penalties of up to $54,000 per contravention – amounting to a possible bill in excess of $1.45 million.
It is not the first time the Han’s Cafe chain has attracted the ire of FWO, after the operator of the Rockingham outlet was pursued for allegedly underpaying workers nearly $28,000 under similar arrangements.
“Responsible franchise service networks should put in place systems to promote compliance with workplace laws and ensure that employees in their network receive their lawful entitlements. The Fair Work Ombudsman will work with franchisors and the franchising sector to ensure those that want to do the right thing by their workers are supported to do so,” said Ombudsman Natalie James.
Such examples are behind the government’s decision to amend Fair Work Act, which will demand greater responsibility and oversight by franchisors of the pay and conditions their franchisees use to employ staff.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.