Employer fined $300k after underpaying staff

by Miklos Bolza19 Aug 2016
The owners-operators of Mamak Malaysian, an inner Sydney restaurant, have been fined almost $300,000 for underpaying staff and using false records to disguise their actions.
At the conclusion of today’s legal proceedings, Federal Circuit Court Judge Justin Smith said the operators of the restaurant’s Haymarket branch had deliberately ignored its legal workplace obligations “in order to maximise profit”.
“That approach, of course, was taken at the cost of the employees, who, in reality, funded the success of the business.”
The Fair Work Ombudsman took legal action after an investigation revealed that six employees were receiving as little as $11 an hour. Between February 2012 and April 2015, they were underpaid a total of $87,000.
The restaurant’s owner-operators Joon Hoe Lee, Julian Lee and Alan Wing-Keung Au have been penalised $36,992, $35,360 and $35,360 respectively. The company Mamak has been penalised an addition $184,960.
To determine the given rate of pay, the company conducted informal market research to see what other restaurants were paying.
“They discovered that there were three approaches – the first were the star-rated restaurants which paid according to the Award, the second were medium restaurants that followed the Award half the time and the third included small restaurants that just paid illegal rates,” Smith said.
The trend of other restaurants failing to follow the Award did not excuse the owners of Mamak, he added.
“The point here is that all of the respondents knew that there was an Award but deliberately chose to ignore it in order to maximise profit.”
In addition to knowingly underpaying their staff, Mamak also deliberately flaunted the law with regards to their record-keeping practices, Smith said.
Mamak has now been ordered to commission a qualified professional to audit pay practices across its other restaurants in Chatswood and the Melbourne CBD as well as a factory in Marrickville where the food is prepared.
“Researching ‘black market’ wage rates in an industry is not the way to determine how to pay your staff,” Fair Work Ombudsman Natalie James said. “Minimum wage rates apply to everyone in Australia – including visa-holders – and they are not negotiable.”
She praised the courts for delivering close to the maximum penalty in this case and for taking the provision of false records to Fair Work inspectors seriously.
“Cases such as this demonstrate the harm that can be caused when businesses fail to keep records, or provide false records to disguise their deliberate underpayment of staff,” she said.
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  • by HerLadyship 19/08/2016 4:15:18 PM

    I would like to think not, but unfortunately many (especially young) employees are ignorant of their Fair Work rights.
    As an HR manager I am more aware than most, and when my children entered the workforce I saw how easily they can get taken advantage of by their employers. Young people are very uncomfortable challenging their contractual terms & conditions, comparing them to the relevant Award, and what they are paid.. Even when I told my son that he was getting taken advantage by his employer, he would not challenge what they paid him.

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