Deliberate underpayments incur penalties for cafe

The Federal Circuit Court has penalised siblings Stavros and Anastasia Petroulias $33,919 and $29,030 respectively, and imposed a $169,596 penalty against a company they part-own and operate, Malevi Pty Ltd. The penalties are the result of the Fair Work Ombuidsman determining that the pair deliberately underpaid 73 staff members more than $180,000 at a cafe they run in Northcote in Melbourne’s inner-northern suburbs.

During the proceedings, the Fair Work Ombudsman showed that the 73 employees were underpaid $180,641 over a 12-month period between April 2017 and April 2018, with underpayments of individual workers, mostly young migrants, ranging from $31 to $12,315. The underpayments were a result of a failure to pay employees the penalty rates and casual loadings they were entitled to under the Restaurant Industry Award 2010, as well as minimum wage rates for some employees.

The Court found that the company and the Petroulias siblings were aware that they were not meeting their obligations but still deliberately contravened workplace laws and exploited staff by paying flat rates of $18 to $25 an hour.

The Court found they also deliberately contravened adverse action laws by not offering further shifts to an employee who challenged his unlawfully low rates – and then continued to underpay other employees. Record-keeping laws were also breached.

“Employers are on notice that they must pay all workers according to Australia’s lawful minimum pay rates or risk significant financial penalties,” Fair Work Ombudsman Sandra Parker said. “We prioritise matters involving vulnerable workers, especially if we think employers are deliberately breaking the law. We also treat very seriously instances of employers taking any sort of action against an employee in response to them seeking to have their lawful workplace rights respected.”

Judge Riley said the exploitation of vulnerable workers was an aggravating feature of the matter and the operators failed to display genuine contrition.

“I do not accept that the respondents are genuinely contrite. Rather, I consider that they are very sorry that they have been caught, and are facing a substantial penalty,” Judge Riley said.

Judge Riley said that there was a need to impose penalties that would deter the respondents from further contraventions and deter others from similar conduct, saying, “The hospitality industry is notorious for its underpayment of employees, and noncompliance with other industrial obligations”.

The Court ordered Malevi Pty Ltd to commission an independent audit of its wage payment practices and provide the results to the FWO, display a workplace notice detailing workers’ rights, and register with the Fair Work website and complete the courses for employers. The Court also ordered the Petroulias siblings to undertake workplace training.

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