Han’s Café franchisees penalised for underpaying workers

The Fair Work Ombudsman has secured a total of $80,000 in penalties against the franchisees of two Han’s Café outlets in Perth after vulnerable staff were underpaid almost $100,000.

The penalties are the result of the Fair Work Ombudsman taking legal actions in response to 27 staff at the Armadale Han’s outlet who were underpaid $67,161 and 22 staff at the Rockingham outlet who were underpaid $27,920.

Phua and Foo Pty Ltd has been penalised $35,000 in relation to underpayments at the Armadale outlet and Tac Pham Pty Ltd has been penalised $37,500 over the underpayments at the Rockingham outlet. In addition, the general manager of the Rockingham outlet, Cuc Thi Thu Pham, has been penalised $7500 for her role in the non-compliance at that outlet. The penalties have been imposed in the Federal Court in Perth.

The underpayments at the two outlets occurred at various times between December 2014 and December 2015. The underpaid employees at the Rockingham outlet included nine juniors aged between 17 and 19 and seven overseas workers, mostly international students, from Vietnam, while the Armadale outlet included one junior aged 18-19. Most of the underpaid workers were employed as kitchen attendants, cooks and food-and-beverage attendants.

Staff at both outlets were paid flat rates which were below the minimums in the Restaurant Industry Award 2010. Employees were underpaid minimum rates for ordinary hours, penalty rates and other entitlements and pay slip laws were also contravened at one outlet. All workers were back-paid in full last year.

Justice Siopis found that the underpayments at the Armadale outlet were the product of a deliberate decision by Phua and Foo Pty Ltd to pay a flat hourly rate “notwithstanding that he was conscious of the fact that weekend penalty rates existed and would have imposed a higher cost for labour for his business/”

The underpayments at the Rockingham outlet occurred despite the Fair Work Ombudsman having advised Mrs Pham and Tac Pham Pty Ltd in 2013 about minimum lawful Award wage rates after receiving an underpayment allegation from a worker. In addition, the judge found that Pham’s lack of English fluency and alleged lack of comprehension of the advice provided by the Fair Work Ombudsman were not satisfactory explanations for the underpayments.

“If she was not able fully to understand the content or gravamen of her dealings with the FWO in 2013, to have obtained professional advice on this issue,” Siopis said, adding that she just chose to “disregard her dealings with the FWO in November 2013 and continued to operate the defective wages payment system which she had inherited, recklessly indifferent as to whether she was, thereby, compliant with the Restaurant Award conditions.”

Siopis said the penalties imposed should deter other operators in the restaurant and café industry from similar conduct. He also ordered the franchisees to commission workplace relations training for managerial staff.

The penalties come after the Fair Work Ombudsman last year secured $37,500 in penalties in Court against the operator of the Han’s Café chain, Tram Hoang Han, and two associated companies for record-keeping practices that were so poor they prevented the Fair Work Ombudsman from determining the full extent of underpayments of vulnerable overseas workers.

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