Crust franchisee accused of underpaying staff $35,000

By Nick Hall | 04 Oct 2018 View comments

A Crust Gourmet Pizza Bar franchisee in Melbourne is currently in hot water over allegations it underpaid seven employees a total of $35,725.

Legal action in the Federal Circuit Court has been commenced by the Fair Work Ombudsman, after receiving a request for assistance from an employee of the Cheltenham Crust outlet owned by Desire Food and company director and part-owner Chern Ming ‘Rick’ Lee.

The Fair Work Ombudsman alleges that this employee had been underpaid a range of minimum entitlements under the Fast Food Industry Award 2010 between October 2013 and May 2016.

The alleged underpayments total $30,416 and stem from a failure to pay minimum ordinary hourly rates casual loadings, annual leave entitlements, a special clothing allowance and penalty rates for night-time, weekend and public holiday work.

Investigations also found similar alleged breaches for six other employees with underpayments ranging from $20 to $2481 between May and August 2017.

All seven of the employees with Crust, which operates under the Retail Food Group banner worked as delivery drivers or pizza makers, with one employee just 17 when the alleged conduct occurred.

Sandra Parker, Fair Work Ombudsman said the fact that at least three of the Crust employees were living in Australia on student visas highlighted the need for greater education and awareness over worker’s rights.

“The Fair Work Ombudsman has taken a fast food franchisee to court today because we have a strong focus on protecting the workplace rights of vulnerable workers in Australia. We are conscious that age, language and cultural barriers, a lack of awareness about workplace entitlements and a reluctance to complain can create difficulties for some workers,” Parker said.

The Fair Work Ombudsman has also alleged that Desire Food and Mr Lee breached workplace laws by providing inspectors with false and misleading records that indicated that employees had been paid higher rates than was actually the case.

Additional alleged breaches included not paying for meal breaks and transport allowance, failing to engage casual employees for a minimum of three hours, not issuing pay slips, failing to issue pay slips that complied with the Fair Work Regulations 2009 and failing to adhere to frequency-of-pay laws.

Parker reiterated that issues of non-compliance within the fast-food sector continue to be primary focus for the Fair Work Ombudsman, following several high profile cases this year.

“More broadly, it is a priority for the Fair Work Ombudsman to ensure that fast food, restaurant and cafe workers receive their correct wages and entitlements. Improving workplace compliance across the sector will help to eliminate the unfair competitive advantage gained by employers who underpay staff,” Parker said

Desire Food Pty Ltd faces penalties of up to $63,000 per contravention and Mr Lee faces penalties of up to $12,600 per contravention.

The Fair Work Ombudsman is also seeking court orders for Desire Food to commission and report on an audit of its compliance with workplace laws, and undertake workplace relations training for managers.