Former juice and coffee bar penalised for second time over JobKeeper violations

conduct, franchisees, cybersquatting, trader, operator, entrepreneur, penalised, deliberate

The former operators of a juice and coffee bar, alongside a director, have been hit once again with penalties by the court after it was determined that they failed to remit the JobKeeper payments that were due to an employee.

The Federal Circuit and Family Court imposed a $26,640 penalty against Rika Foods North Melbourne Pty Ltd, which operated a juice and coffee bar in the city, and a $5328 penalty against company director Radomir Pantovic, as they failed to comply with a Compliance Notice requiring it to calculate and back-pay JobKeeper entitlements to a worker, in her early 20s, who had been employed on a casual basis.

The Compliance Notice was issued by a Fair Work inspector after having found that Rika Foods North Melbourne Pty Ltd received $14,400 in JobKeeper payments from the Australian Taxation Office that was due for the worker between September 2020 and March 2021 but failed to provide those payments to her.

In her decision, Judge Heather Riley found that the failure to comply with the Compliance Notice was deliberate and involved a failure to back-pay a “substantial amount of money in anyone’s terms, but particularly for a casual worker in the hospitality industry”.

“Of course, the whole point of JobKeeper payments to employers was to enable them to pay their staff when business was slow or non-existent,” Judge Riley said. “The point of JobKeeper payments was not for employers to retain the money for their own benefit, as has happened in this case.”

Thus, in addition to the penalties, the Court also ordered Rika Foods North Melbourne Pty Ltd to pay the $14,400 in JobKeeper payments to the worker, plus interest.

This is not the first time Rika Foods North Melbourne Pty Ltd and Pantovic have been the subject of a Fair Work Ombudsman action as they were penalised by the court in 2022 amounting to $11,988 for failing to comply with a Compliance Notice that required a backpayment of entitlements to a visa holder worker.

Fair Work Ombudsman Sandra Parker said the failure to follow the law on how JobKeeper payments had to be used is disappointing.

“We are prepared to take enforcement action to protect the integrity of Commonwealth Government-funded schemes designed to have payments provided to workers,” Parker said. “When our Compliance Notices are not followed, we are ready to take legal action to ensure workers receive all their lawful entitlements, in addition to pursuing court penalties.

“Employers also need to be aware that taking action to improve compliance in the fast food, restaurant and cafĂ© sector is an enduring priority for the FWO,” she stressed.

The court also found that the company and Pantovic had shown no regret for their conduct and there was a need to impose penalties to deter them and other employers from similar conduct in future. This situation led to Judge Riley also ordering that the matter be referred to the Commissioner of Taxation “for investigation into whether the respondents have breached any laws administered by the Commissioner in circumstances where the respondents have admitted to failing to remit JobKeeper payments”.