Subway franchisee facing Court for exploiting employee

A Chinese worker has allegedly been underpaid more than $16,0000

Subway franchisee facing Court for exploiting employee

The franchisee of two Subway outlets is facing Court for allegedly underpaying a Chinese employee in excess of $16,000.

Legal action has commenced in the Federal Circuit Court by the Fair Work Ombudsman against Danmin “Irene” Zhang, who, with her husband, owns the Subway franchise outlets in Sydney.

The company Zhang and her husband operate, G & Z United Pty Ltd, is also facing Court.

G & Z United Pty Ltd faces penalties of up to $54,000 per contravention and Ms Zhang faces penalties of up to $10,800 per contravention.

The FWO alleges a Chinese employee was underpaid $16,345 for work performed across the Artarmon and Stanmore Subway stores between October 2014 and April 2016, except for a four-month period where she returned to China.

The worker, aged in her late 20s, was in Australia on a Skilled Nominated (subclass 190) visa at the time. FWO inspectors investigated after she lodged a request for assistance.

It is alleged that inspectors found she had been paid flat rates of $14 to $14.50 for all hours worked, leading to underpayment of her minimum hourly rates for ordinary hours, casual loadings and penalty rates for evening, weekend and public holiday work.

She was entitled to receive minimum rates of more than $18, plus casual loading, for ordinary hours and penalty rates of up to $52.22 on public holidays under the Fast Food Industry Award 2010.

Moreover, a special clothing allowance was allegedly also underpaid and laws relating to record-keeping, pay slips and requirements to inform employees about their terms of engagement and classification were allegedly violated. The worker was back-paid in full earlier this year.

It is also alleged the underpayment of the worker occurred despite Ms Zhang having received summaries of applicable minimum Award wage rates from the Independent Purchasing Company Australasia.

That’s the company which works closely with the Subway franchisor to help ensure Subway franchisee outlets meet compliance and branding requirements.

Fair Work Ombudsman Natalie James said legal action has been commenced because of the alleged blatant exploitation of a vulnerable overseas worker.

James said the exploitation of workers in franchises continues to be an ongoing problem for the FWO and she welcomed the Government’s proposed new laws relating to underpayments within franchise networks.

In April this year, James made a submission to a Senate Inquiry supporting the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. James stated that the package of measures contained in the Bill will go some way to giving the FWO the tools to combat the most serious worker exploitation.

James said that in an environment where the public are demanding greater transparency and accountability by well-known franchise brands, it is crucial that franchise service networks are proactive in ensuring they have systems in place to promote and ensure compliance.

She added that the Fair Work Ombudsman remains keen to work with businesses that want to make a commitment to compliance with workplace laws part of their brand.

“With the Government proposing new laws to capture franchisors that fail to deal with exploitation of workers by their franchisees, the Fair Work Ombudsman’s door is always open,” said James.  

“We are always willing to work with any franchise ready to take action to show it takes compliance with workplace laws throughout its network seriously.”



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