The Fair Work Ombudsman has entered into a Court-Enforceable Undertaking (EU) with George Calombaris’ MAdE Establishments following their self-disclosure of wide-scale underpayments in 2017, initially estimated at $2.6 million.
After further investigation, the underpayments owing to over 500 current and former employees amounted to $7.83 million. The massive underpayments have been attributed to a systemic compliance issues, including (but not limited to):
- Failing to pay minimum wage conditions and overtime;
- Failing to pay casual loading, holiday and weekend penalty rates;
- Failing to keep records of hours worked by staff resulting in significant underpayments with respect to overtime and penalty rates, particularly for staff on annualised salary arrangements; and
- Failure to correctly classify staff at appropriate levels under the award.
In addition to the $7.83 million in back-pay paid by MAdE Establishments prior to signing the EU, a $200,000 ‘contrition payment’ has been imposed.
The EU will continue until 2022 and requires the MAdE Establishments to foot the bill for external auditors to check pay and conditions yearly for all staff, and for training of human resources, recruitment, payroll, and on-site management staff (including Head Chefs) on compliance with workplace laws and the rights and responsibilities of employers under the Fair Work Act and the Restaurant Award.
Under the EU, MasterChef’s George Calombaris will be required to complete a least 7 speaking engagements to educate the industry on the importance of compliance with Australia’s workplace laws.
These speaking engagements will likely form part of the Ombudsman’s education push in relation to the Fast Food, Restaurant and Café sector, a priority area for the Ombudsman in 2019/2020.
All MAdE Group social media accounts and websites are also required to publish an apology in a prescribed form, which must remain on their websites for 3 months and ‘pinned’ to the top of social media feeds for 14 days. The public apology can be viewed here.
The Ombudsman Sandra Parker has again warned that they will be ‘cracking down on underpayments in the fast food, restaurant and café sector and we urge employers to check if they are paying their staff correctly.’
Whilst it might seem incredible (and to some, unbelievable) that a company could inadvertently or mistakenly underpay employees to such a large degree, Australia’s workplace laws can be complicated, and achieving award compliance can be more difficult than people realise.
If you are in the Fast Food, Restaurant and Cafe sector, Terri Bell & Co can help you audit your compliance with the relevant awards and provide advice regarding how the awards apply to your business. Contact us today on (02) 9191 9856 or at email@example.com.
Terri Bell, Principal
Ellie Wolfenden, Lawyer