Crust franchise facing $54,000 discrimination penalty

By Nick Hall | 23 Oct 2018 View comments

A Crust Gourmet Pizza franchise outlet in Hobart is facing allegations of discrimination following an investigation by the Fair Work Ombudsman (FWO).

The franchise allegedly discriminated against four overseas workers by paying them far less than Australian employees, prompting the FWO to commence legal action against the outlet.

The impending Federal Circuit Court action sees QHA Foods Pty Ltd, the operator of the Crust outlet on Elizabeth Street in North Hobart, as well as two of the company’s directors and shareholders defending the alleged breaches of workplace laws.

Specifically, the outlet and directors are accused of breaching the provision of the Fair Work Act that makes it unlawful to discriminate against employees on the basis of their nationality.

Three Bangladeshi nationals and one Indian national employed by the franchise, who were in Australia on student visas at the time, were allegedly underpaid a total of $9,926 for work performed between January and July 2016.

The FWO alleges that the four workers were paid a flat rate of just $12 per hour, plus $1 per pizza delivery, a significant reduction of ordinary rates, casual and evening loadings and penalty rates for weekend and public holiday work.

Additionally, the four workers were paid in cash and not provided with pay slips, the FWO alleges.

In contrast, Australian employees at the Crust Pizza outlet were allegedly paid higher minimum rates of pay and penalty rates, including a cents-per-kilometre rate for deliveries, however beaches were still evident among these workers.

The FWO alleges that the incorrect application of some provisions in the Award resulted in 10 Australian workers being underpaid a total of $6,252.

It’s the second time in just three weeks that the FWO has initiated legal action against the operators of a Crust franchise outlet, with Inside Franchise Business reporting a Melbourne franchisee had allegedly underpaid seven employees a total of $35,725.

Sandra Parker, Fair Work Ombudsman said this case was particularly concerning as the two directors facing discrimination allegations both came from the same cultural background.

“We allege that four migrant workers were paid significantly less than other staff at a Crust pizza franchisee because they were not Australian. Migrant workers have the same rights and entitlements as Australian workers and must be paid according to our national awards,” Parker said.

“Employers should note that we are prioritising matters involving requests for assistance from migrant workers as they can be particularly vulnerable in the workplace and reluctant to complain. We encourage any workers with concerns about their wages or entitlements to contact the Fair Work Ombudsman.”

QHA Foods Pty Ltd faces a maximum penalty of up to $54,000 per breach with the two directors facing penalties of up to $10,800 per breach.

The matter is listed in the Federal Circuit Court in Hobart on November 23.