A former Han’s Café franchisee in Perth is the first to be penalised by the court under the “serious contraventions” provisions of the Protecting Vulnerable Workers laws, for having underpaid vulnerable workers for the second time.
The Federal Circuit Court has ordered Tac Pham Pty Ltd, the former franchisee of the Han’s Café Rockingham outlet, to pay penalties of $191,646. The former general manager of the outlet, Cuc Thi Thu Pham, has also been ordered to pay $38,394.
The company and Pham were found to have underpaid 11 employees – including a number of young and migrant workers – a total of $5111 between October 2017 and April 2018. The employees were back-paid only after the Fair Work Ombudsman commenced its latest investigation.
FWO inspectors discovered the contraventions while auditing the business. The breaches in the latest litigation related to underpayment of ordinary minimum hourly rates, penalty rates, minimum shift-pay and an allowance, and regular failures to provide payslips and to provide lawfully required information within payslips when they were issued.
Three of the contraventions – relating to failures to provide required information within payslips and underpayment of both adult and junior minimum wages – met the definition of “serious contraventions” under the Protecting Vulnerable Laws because of the repeat offences the operator committed.
Under the said laws, which came into effect in September 2017, the maximum penalties for serious contraventions are $630,000 per breach for a company and $126,000 for an individual, 10 times the penalties which would ordinarily apply.
Fair Work Ombudsman Sandra Parker stated that the ruling highlighted the value of the serious contraventions powers in providing a significant deterrent for employers from continuously committing such offences.
“We will continue to make full use of the Protecting Vulnerable Workers laws to ensure that any individuals or companies who commit serious contraventions are held to account and understand the consequences of their failures,” Parker said.
“Repeat offending is simply unacceptable. Employers should also be aware that we treat cases involving underpayment of young and migrant workers particularly seriously, because we are conscious that they can be vulnerable due to factors such as a lack of awareness of their entitlements and a reluctance to complain. Any workers with concerns should contact us,” Parker added.
Tac Pham Pty Ltd and Pham were previously penalised in March 2018 for payslip law breaches against 22 staff who were underpaid $27,920 at the Rockingham café between December 2014 and December 2015. The respondents admitted to the latest violations.
Judge Christopher Kendall said the latest litigation revealed the extent of the non-compliance by the respondents had increased, despite commitments from Pham during the earlier court proceedings to improve payroll practices.
“The respondents had no intention of changing their conduct and would have continued as they had been if the [Fair Work Ombudsman] had not intervened when it did,” Judge Kendall said. “The fact that the respondents did not take steps to engage an external [payroll] consultant for over one year after they had said they would do so and only in response to the [FWO]’s investigation is, again, entirely unsatisfactory.”
The judge bemoaned the fact that the respondents failed to comply with the most basic obligations owed to employees describing their conduct as a “cavalier and entirely unacceptable approach to core legal obligations”.