Disregard of compliance notice incurs penalties for restaurant

The Federal Circuit Court has imposed an $18,270 penalty against Soma Kitchen Pty Ltd, the company that operated the Soma Kitchen restaurant in Fremantle, Western Australia and a $3654 penalty against the company’s director, Giancarlo Daniele, for failing to comply with a Compliance Notice requiring the company to calculate and back-pay entitlements owing to a former employee.

The Court also ordered Soma Kitchen to comply with the Compliance Notice, including by back-paying the worker’s outstanding entitlements in full, plus interest.

The decision came after a Fair Work investigation conducted when a Soma Kitchen worker came forward with the allegation that he was paid just $200 for approximately 146 hours of work. The inspector issued Soma Kitchen a Compliance Notice as a result and when he contacted Daniele to follow up with him about the Compliance Notice, Daniele stated that the Notice was, “Sitting on my desk to action. I might do it today.”

Judge Christopher Kendall noted that Daniele and Soma Kitchen had shown a “complete disregard for their legal obligations” and shown “no contrition, taken no corrective action and have demonstrated a lack of cooperation throughout the entire period in which the (FWO) has been engaging with them”.

Judge Kendall said that non-compliance with a Compliance Notice “not only undermines the fundamental purpose of [the relevant Fair Work Act] section (i.e., to avoid litigation and encourage efficiency in the resolution of any identified shortcomings by employers), it also inhibits Fair Work Inspectors and the [FWO] from carrying out their roles and functions in relation to enforcing the legislation.”

Judge Kendall said the Court was not required to consider the underlying contraventions that caused the Compliance Notice to be issued.

Fair Work Ombudsman Sandra Parker said that businesses that fail to act on Compliance Notices face significant court-imposed penalties in addition to having to back-pay any underpaid staff.

“We make every effort to secure voluntary compliance with Compliance Notices but where they are not followed, we are prepared to take legal action to ensure workers receive their lawful entitlements,” Parker said. “Employers also need to be aware that improving compliance in the fast food, restaurant and café sector continues to be a priority for the Fair Work Ombudsman.”

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