The franchisee of a popular city cafe could be penalised close to $1 million for deliberately falsifying records to cover systemic underpayment of staff wages.
Sajid Amin, a director of SHMAP Group which owns and operates a Degani Bakery Cafe in Melbourne’s north-east, will face the Federal Circuit Court after the Fair Work Ombudsman (FWO) alleged he created fraudulent records to conceal underpayments to 15 employees.
In just nine weeks between September and November 2016, it is alleged Mr Amin and his business underpaid the workers amounting to $12,506 by paying wages of as low as $15 an hour – well below the base rates including casual loading of $20.09 and public holiday rates of up to $40.18.
One worker claimed Mr Amin asked them to sign blank time sheets which were subsequently completed with false hours, while another claimed Mr Amin demanded he change his work dates for Australia Day and Labour Day, so as to avoid paying the public holiday penalty rates.
The FWO said Mr Amin was fully aware of his obligations, having completed its online training course and also receiving advice from the franchisor, meaning the underpayments and record tampering were not accidental oversights.
All workers have since been backpaid.
Each contravention of Fair Work laws can see penalties of $54,000 for companies and $10,800 for individuals.
As such, if Mr Amin and SHMAP Group are found guilty of all 15 underpayments, the combined penalties could reach almost $1 million.
Earlier this month, a separate Degani outlet south of Melbourne was found to have short-changed 15 of its workers by almost $10,000, again by paying flat hourly rates.
“Allegations that young workers and migrant workers were underpaid are particularly serious, especially when coupled with claims that some were asked to participate in the falsification of records to conceal these unlawfully low rates,” Ombudsman Natalie James said.
In October last year, the Fair Work Act indicated to hold franchisors responsible for record keeping and wage payments within their franchise networks.
However, a spokesperson for the FWO said that Degani Australia is not a respondent in these court proceedings.
According to its website, Degani has “over 80 cafes, restaurants and kiosks” in Australia; however the site lists 60 locations across four states, primarily in Victoria.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.