A franchisee will face court in May after the Fair Work Ombudsman accused him of shortchanging a total of 154 workers in their eligible wages.
The Ombudsman announced that it has launched legal action against Loke Cheng Wong and two companies of which he is a director and part owner: PPR Ryde (NSW) Pty Ltd and Gateharvest Pty Ltd.
It alleged that Mr Wong and the companies — which between them currently operate a PappaRich outlet at Macquarie Park in Sydney, and previously operated two other outlets in Chatswood and the Sydney CBD — underpaid their workforce through the use of flat rates.
According to the FWO, flat rates of between $13 and $14.50 per hour were paid between 29 May and 2 July in 2017, with the alleged underpayments discovered during an audit blitz.
The large number of employees were allegedly underpaid a combined $74,000. The FWO said that the majority came from the Macquarie Park outlet, with 73 workers allegedly owed $34,834. The other two stores accounted for the remainder: 42 workers and $22,533 at the Chatswood outlet, and 39 workers and $16,633 at the Sydney outlet.
Other breaches of workplace laws are also being levelled at Mr Wong and his companies, relating to record-keeping, pay slips and other employee entitlements.
Ombudsman Sandra Parker suggested that the case reinforces the FWO’s targeting of employers in the fast food sector, and in particular franchise operators.
“Enforcing compliance with workplace laws in the fast food, restaurant and catering sector continues to be a priority for the Fair Work Ombudsman,” she said.
“Franchise outlets are on notice that they must pay all employees according to Australia’s lawful minimum pay rates.”
If found guilty, Mr Wong faces penalties of up to $12,600 for every breach, while each company could face fines of up to $63,000 per breach.
The case is due to face the Federal Circuit Court on 3 May 2019.
PappaRich is a chain of Malaysian-inspired eateries. According to its website, the business currently has 28 outlets spread across every state and territory of mainland Australia.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.