Restaurant faces court for ignoring back-pay order

The Fair Work Ombudsman (FWO) has commenced legal action to enforce terms of a Court-Enforceable Undertaking (EU) that was executed with Saffron Indian Gourmet Pty Ltd (Saffron) earlier this year.

Saffron, which operated a restaurant located at Broadbeach on the Gold Coast, and its Director and sole shareholder, Sridhar Penumechchu, entered into the EU after Fair Work Inspectors found 22 employees had been underpaid a total of $54,470. Saffron and Penumechchu had admitted to underpaying the employees in the EU.

The FWO alleged that the restaurant failed to comply with terms of the EU that required it to back-pay the employees in full and make a $25,000 donation to the Gold Coast Community Legal Centre. It also alleged that more than $49,000 of the underpayments are outstanding and the donation has not been made.

It is further alleged that the company failed to engage an external professional to complete an audit of the pay and conditions of all employees; complete online training; or provide records and other evidence to demonstrate it is complying with the Fair Work Act.

The FWO is seeking court orders requiring Saffron and Penumechchu to comply with the terms of the EU not complied with and will also seek an order for the FWO’s legal costs.

Fair Work Ombudsman Sandra Parker reminded employers that the terms of undertakings will be enforced in court if not complied with.

“Court-Enforceable Undertakings allow the Fair Work Ombudsman to achieve effective outcomes after employers admit to breaching workplace laws, such as prompt back payments for workers, which may not be possible through a full-scale litigation process. However, if a company fails to adhere to the compliance measures it has committed to, we will take legal action to ensure that workers receive their lawful wages and entitlements, and to protect the integrity of our enforcement tools,” Parker said.

Fair Work Inspectors investigated the restaurant after receiving an anonymous tip-off from an employee. They found 22 workers were paid flat hourly rates between $15 and $18.50 leading to underpayment of the ordinary hourly rates, casual loadings, and weekend and public holiday penalty rates under Restaurant Industry Award.

Most of the employees were visa holders, including 14 international students and five temporary work visa holders. Individual underpayments ranged from $143 to $9,457.

The case is listed for a directions hearing in the Federal Circuit Court in Brisbane on 27 March 2020.

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