Cup cake retailer penalised over underpayments

The operators of a chain of cupcake stores have been penalised for underpaying 35 employees a total of $57,179.69 between January 2018 to February 2019, and for contravening record-keeping and payslip laws.

The Federal Circuit Court has imposed a $41,580 penalty against Shri Krishna Guru Pty Ltd, which operates Little Cupcakes retail stores in the Melbourne CBD and as a baking facility, and fined the company’s director Shreyansh Dharmesh Shah $8316.

Judge Karl Blake highlighted the fact 10 of the affected employees were juniors aged under 21 and most of the employees were visa holders, from countries including South Korea, India and Indonesia. He deemed the actions to be “deliberate, sustained, serious breaches, which affected employees who were vulnerable to exploitation”, saying that there was a need to impose penalties to create general deterrence.

“There is significant non-compliance by employers in the takeaway food services industry and there is a need to deter non-compliance with workplace laws in that industry,” Judge Blake said.

Fair Work Ombudsman Sandra Parker added that improving compliance in the fast food, restaurant and café sector remained a top priority.

“The underpayment of young and vulnerable workers is a particularly concerning feature of this matter and employers need to be aware there are serious consequences for such conduct,” Parker said. “We will continue to enforce workplace laws in a proportionate manner during the COVID-19 pandemic and hold employers to account in order to protect employees.”

Fair Work Inspectors audited Shri Krishna Guru in one of their unannounced workplace visits targeting restaurants and cafes in the Melbourne CBD area.

Most of the underpayments of Shri Krishna Guru employees related to underpayment of casual loadings under the Fast Food Industry Award 2010. Employees were also variously underpaid leave loadings, minimum-engagement pay, minimum hourly rates and loadings for weekend, public holiday, evening, and overtime work under the Award. Underpayments of individual workers ranged from $20.08 to $10,960.77. The company has subsequently rectified the underpayments in full.