“All spaghetti and no meatballs”: FWO seeks penalties against a restaurant that deliberately disregarded advice and underpaid employees

It is no secret that the Fair Work Ombudsman (FWO) has been cracking down on employers breaching their employment obligations under the Fair Work Act 2009 (Cth) (the FW Act) and exploiting vulnerable workers in order to gain financial and competitive advantage.

Indeed, the Federal Government is very close to passing a Bill through Parliament that will not only impose much harsher penalties on employers but will also increase the FWO’s powers to investigate this type of behaviour.

For most employers, contact from the FWO will arise as a result of an inadvertent breach of the FW Act. Once the employer realises there is an error in their compliance, steps will be taken to rectify it, by fixing underpayments and/or putting systems in place that ensure accurate records are being kept and employees are receiving their correct entitlements.

The FWO is more forgiving when employers act quickly in this regard to achieve compliance.

However, that leniency disappears when the employer does not swiftly act to rectify matters and continues to breach the FW Act, ignoring advice about their employment obligations.

The latest employer to feel the wrath of the FWO is popular Melbourne restaurant, Meatball and Wine Bar, and its owner, Mr Matteo Bruno.

Mr Bruno and his company are now due to face the Federal Circuit Court after the FWO filed proceedings against them alleging that they underpaid 26 workers across three of their restaurants – 10 of whom were visa holders and 22 of whom were in their twenties.

The total underpayment amount is alleged to have been $14,149 between July 2016 and October 2016, the highest individual underpayment being $1,419.16 for a wait staff who was paid a flat rate of $17.95 when he should have been paid $18.91 and $28.37 for overtime worked, under the Restaurant Industry Award 2010.

Following notice of the underpayment, Mr Bruno moved to repay the full amounts owing to the employees.

However, what Mr Bruno has not been able to rectify, and what the FWO is alleging in the proceedings (amongst other things), is the fact that he and the company received comprehensive pay and conditions guides from a private employment adviser and had the assistance of accountants when managing the company’s accounts and payroll administration yet still underpaid 26 employees.

The FWO is seeking penalties against both Mr Bruno and the company for breaching the FW Act.  

Employers should not and cannot risk waiting until an employee lodges a complaint with the FWO to rectify pay mistakes – especially where they are aware a mistake has been made. The FWO also acts on its own initiative through proactive workplace audits and compliance campaigns, and this is how the Meatball and Wine Bar came to the FWO’s attention. 

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

02 9256 7500 | sydney@workplacelaw.com.au

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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