Restaurant hit with $200,000 penalty for underpaying 40 employees

italian restaurant

The Fair Work Ombudsman has secured penalties totalling over $200,000 penalties against the operator of Gilson Restaurant that offers Italian cuisine in Melbourne’s South Yarra.

The Federal Circuit Court fined company Domain Botanical Business Pty Ltd $170,100 and ordered the company’s sole director James McBride to pay a penalty of $34,020 against after they underpaying 40 employees a total of $53,850 between December 2017 and June 2018. The company paid flat hourly rates as low as $18 per hour to casual workers, failing to meet minimum hourly rates, casual loading, overtime rates and various penalty rates owed under the Restaurant Industry Award 2010.

The company also failed to provide adequate meal breaks, to keep records of time worked and to undertake required reconciliations for full-time annualised salary employees.

Judge Philip Burchardt highlighted that many of those underpaid were visa holders from non-English speaking countries. The workers were on student visas, working holiday visas or partner visas and came from countries including France, Brazil, Nepal and Chile. Almost half of them were under 25 years old at the time of the underpayments. They were generally engaged as kitchen attendants, waiters or cooks.

Fair Work Ombudsman Sandra Parker stressed that the FWO pay particular attention to cases involving young and migrant workers in the fast food, restaurant and cafés sector because of the number of recurring compliance issues in that sector.

“The Fair Work Ombudsman does not tolerate the exploitation of any worker, including migrants who can be vulnerable due to factors such as limited English or little understanding of their rights under Australian law. All workers in Australia have the same rights, regardless of citizenship or visa status,” Parker said.

“Employers are urged to prioritise workplace law compliance or risk substantial court-ordered penalties on top of back-payments. Any employees with concerns about their pay or entitlements should contact us for free advice and assistance,” Parker added.

“[I]f he was not deliberate in his breaches of the award obligations, he was, at the very least, wilfully blind to them,” Judge Burchardt said of Mr McBride in a written judgement, adding that the timekeeping contraventions “strike at a matter central to the system of industrial regulation”.

“Equally, however, the failure to pay employees their wages and to give them their benefits under the award is also, in my view, of commensurate seriousness… bearing in mind the nature of the industry and the disadvantaged nature of the employees,” Judge Burchardt said.

The issue came to light as part of an auditing campaign of the hospitality sector. The company fully rectified underpayments in July last year after the FWO commenced litigation.