The Fair Work Ombudsman (FWO) launched legal action against Danmin Zhang, who, together with her husband, operates the business G & Z United Pty Ltd, which formerly operated two Subway outlets in the Sydney suburbs of Artarmon (pictured) on the North Shore and Stanmore in the Inner West.
An investigation by Fair Work inspectors determined that the female employee, who worked at both stores, had been paid flat rates of between $14 and $14.50, between October 2014 and April 2016. That resulted in a shortfall of $16,345.
“It is unlawful for employers to pay their employees low, flat rates that undercut minimum award wage rates. This franchisee paid their worker a flat rate that was $4 below the lawful rate,” Ombudsman Sandra Parker said.
The FWO noted that the Fast Food Industry Award sets a minimum rate of $18 per hour plus casual loading, with penalty rates of up to $52.22 for hours worked on public holidays.
As well as the underpayment of wages, breaches were also found in terms of record-keeping, issuing payslips and providing employees with notification of their terms of engagement. A special clothing allowance was also found to have been underpaid.
While the employee, who at the time was in Australia on a skilled nominated visa, was repaid in full in 2017, Judge Julia Baird of the Federal Circuit Court slapped a penalty of $56,183 on G & Z United, and a personal penalty of $9,255 on Ms Zhang.
“The penalty should send a message to fast food businesses that compliance in the workplace is not an option — it’s the law,” Ms Parker said.
“Every worker in Australia has the same workplace rights and we encourage anyone with concerns to contact the Fair Work Ombudsman.”
FWO noted that the Subway outlets are no longer operated by Ms Zhang and her company.
“The FWO makes no allegations against the current operators,” it said.
Subway Australia has been contacted for comment.