The franchisee of a Pizza Hut outlet at Newcastle, in NSW, underpaid 24 employees a total of almost $20,000, an investigation by the Fair Work Ombudsman has found.
The underpayments occurred at the Pizza Hut outlet on Hunter Street.
An investigation was commenced after six of the outlet’s employees attended the Fair Work Ombudsman’s Newcastle office and made underpayment allegations.
Fair Work inspectors found that 24 casual employees at the Newcastle Pizza Hut outlet were underpaid a total of $19,762 between November 2015 and May 2016.
Most of the employees were juniors aged between 16 and 20. The underpaid employees also included international students from Pakistan and Kenya.
The employees performed a range of duties, including customer service, making pizzas, deliveries, cleaning the store and assisting to open and close the store.
The employees were paid low, flat rates that were unlawful because they undercut the minimum rates for ordinary hours, overtime and public holiday work that applied under the Fast Food Industry Award 2010 and an Agreement covering the outlet’s staff.
Four of the workers were underpaid more than $3000, with the largest individual underpayment being $4791 of an international student from Kenya. Record-keeping and pay slip laws were also contravened.
At the time of the underpayments, store operator Bhavinkumar Patel was operating his first business since immigrating from India and was not fully aware of his obligations under Australia’s workplace laws. He told inspectors that he had not received training on his obligations on workplace laws from the Pizza Hut head franchisor.
Patel fully co-operated with inspectors. Patel and Ambeshwar Pty Ltd have started rectifying the underpayments and have entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman.
Under the terms of the EU, Patel and Ambeshwar have agreed to back-pay all employees in full by January 2018 via a back-payment plan and to take a range of steps to ensure future compliance, including commissioning independent audits of the outlet.
The Fair Work Ombudsman last year completed a compliance activity involving 34 Pizza Hut franchisees and identified widespread issues relating to the engagement of delivery drivers in the franchise network. Following the completion of all outstanding investigations arising from the compliance activity, Inspectors identified that of 32 franchisees engaging delivery drivers, there were 28 franchisees with non-compliance issues.
Fair Work Ombudsman Natalie James says her Agency is concerned about the lack of any meaningful response or commitment from Pizza Hut head office since publication of the findings of the Pizza Hut compliance activity on 27 January 2017.
“Based on the response so far, I am not confident Pizza Hut head office is taking our concerns about non-compliance within its network seriously,” she said.
James says it is of particular concern that while the previous compliance activity had focused on issues relating to Pizza Hut delivery drivers, non-compliance issues now seem to be emerging with in-store Pizza Hut staff.
“If this non-compliance is replicated across the Pizza Hut network to the same extent of the delivery drivers, it would represent a significant failure to provide lawful wages and entitlements to the Pizza Hut workforce,” she said.
“Given the seriousness and potential impact of non-compliance in the Pizza Hut franchise, I am disappointed that we have not seen any concrete action from Pizza Hut head office.
“My agency will continue to target non-compliance in the Pizza Hut network, however, our strong preference is to work with head office to prevent these instances from occurring in the first place.”
James also said the Fair Work Ombudsman continues to engage with representatives from the franchising sector about ways in which they can contribute to building a culture of compliance with workplace laws.
Inside Small Business
