$300k penalties for burger bar highlight cultural issues in hospitality
Inside Small Business
May 11, 2018
Penalties of more than $300,000 against a former Melbourne burger bar operator for exploiting young and overseas workers are the latest wake-up call to the hospitality industry to improve widespread non-compliance, according to Fair Work Ombudsman Natalie James.
Todd Patrick Buzza, who formerly owned and ran two Burger Buzz outlets in Melbourne has been penalised $51,735 and his company Rum Runner Trading Pty Ltd has been penalised an additional $258,495 over the exploitation.
The penalties, imposed in the Federal Circuit Court, are the result of the Fair Work Ombudsman taking two separate legal actions against Buzza and his company for what Judge Suzanne Jones called “blatant” and “extraordinary” conduct. The penalties are also the latest of a string of penalties secured by the Fair Work Ombudsman against hospitality industry employers.
Ms James said that restaurants, cafés and takeaway food outlets accounted for 29 per cent of the Fair Work Ombudsman’s litigations in 2015-16 and 2016-17.
“It is deplorable that nearly one third of the most serious cases that end up in court involve this one sector,” Ms James said.
“The Fair Work Ombudsman’s experience and data suggests that a disturbing culture of non-compliance has emerged in the restaurant, cafe and fast food sector that is completely unacceptable. There is a growing intolerance in the community for underpayment of workers in this sector.”
Ms James stated that it is a major concern that hospitality industry workers make up 7.2 per cent of the labour market but so far in this financial year they account for more than 25 per cent of the underpaid workers the Fair Work Ombudsman has secured back-pay for. In 2016-17 the hospitality industry also constituted 39 per cent of anonymous tip-offs from workers received by the Fair Work Ombudsman.
“Unless industry leaders take action to overhaul a culture where underpayment of wages has become normalised, this sector and its individual businesses will increasingly attract the attention of law makers and find itself in the middle of media storms,” Ms James said.
“We appreciate workplace laws can seem complex but there has never been more freely available information to help employers understand their obligations, and there is no excuse for failing to check what lawful minimum pay rates apply. It’s not good enough to pay employees unlawfully low rates because that’s what the business next door does or because that’s what the person you bought the business off did.”