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Introduction

The operator of Coburg restaurant, The Old Cop Shop, has been penalised $22,050 in Court for failing to comply with a Compliance Notice issued by the Fair Work Ombudsman.

Federal Court

The Court found that The Old Cop Shop Eatery Pty Ltd contravened the Fair Work Act by failing to comply with a Compliance Notice requiring it to calculate and back-pay alleged underpayments of a former employee, aged 21.

In addition to the penalty, the Federal Circuit Court ordered The Old Cop Shop Eatery Pty Ltd to rectify the underpayment of the food and beverage attendant plus interest.

Businesses must comply

Fair Work Ombudsman Sandra Parker said the outcome reinforced the importance of Compliance Notices in helping inspectors recover wages for underpaid workers.

“Compliance Notices are an important tool we use to get unpaid wages back into workers’ pockets in a timely manner. If employers do not comply with Compliance Notices, they can face court-imposed fines in addition to the initial wages back-payment bill.”

“We encourage any workers with concerns about their pay and entitlements to contact us for free assistance,” Ms Parker said.

Fair Work Inspectors conducted an investigation into The Old Cop Shop following a request for assistance from the employee.

The Compliance Notice was issued after a Fair Work Inspector conducted an investigation and formed a belief that the restaurant, between April and June last year, had underpaid the employee’s minimum wage rate for ordinary hours, casual loading, and penalty rates for Sunday and public holiday work under the Restaurant Industry Award 2010.

Judge Heather Riley found that the contravention was deliberate, The Old Cop Shop had not displayed any co-operation, contrition nor taken any corrective action, and the affected worker was young and vulnerable.

Judge Riley said that general deterrence was “a significant factor in this case, given that the restaurant industry is notorious for underpayments to staff”.

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Introduction

Qantas has entered into a Court-Enforceable Undertaking (EU) with the Fair Work Ombudsman and will back pay hundreds of workers millions of dollars.

 The FWO investigated Qantas after the airline self-reported that it had incorrectly paid some of its marketing and administrative staff in accordance with the terms of individual contracts of employment, rather than the relevant enterprise agreements that covered and applied to them.

As a result, employees did not receive the minimum terms of the relevant enterprise agreements, including minimum wages, overtime, annual leave entitlements and superannuation, which led to underpayments and record-keeping breaches.

$7.1 million  paid to 638 employees already

To date, Qantas has back paid $7.1 million to 638 employees who were underpaid between June 2011 and June 2019. Head office staff in corporate and administration roles were affected.

The airline has paid interest on all back payments using an interest rate six per cent above the RBA cash rate, and an additional payment of $1,000 to affected workers, at a total of $2 million.

The Fair Work Ombudsman

Fair Work Ombudsman Sandra Parker said that the regulator considered an EU appropriate after Qantas proactively notified the FWO and fully cooperated with the investigation.

“Qantas has come forward and admitted to breaching the Fair Work Act for several years and significantly underpaying hundreds of its employees several million dollars,” Ms Parker said.

“The EU creates a robust process where an independent expert will verify that employee back payments are correctly calculated and paid by Qantas. Three further pay audits will also be conducted by an independent auditior, which will benefit Qantas’ current and future employees.”

“This independent analysis will reduce the burden on the Fair Work Ombudsman, and subsequent cost to the taxpayer, for ensuring that Qantas back pays its staff correctly.”

The Court Enforced Undertaking

Under the EU, Qantas will set up an independent employee hotline and complaints system within 30 days. The airline will directly apologise to affected employees and place public notices on its intranet, website   and Facebook page for one month, as well as in national newspapers.

The Court-Enforceable Undertaking commits Qantas to calculating and rectifying any further underpayments by 24 April 2020. Qantas will then make a contrition payment to the Commonwealth’s Consolidated Revenue Fund equal to 5.5 per cent of its underpayments.

Under the EU, an expert will conduct its own review of the underpayments, which is due to be completed by 14 October 2020, and report its results directly to the FWO. Any further underpayments identified by the expert will be back-paid with interest, an additional payment of $2,000 to affected employees and attract a higher contrition payment of 7 per cent.

“Viewed together, the back payment bill, interest paid on underpayments, additional payments made to impacted staff and contrition payment impose a significant cost on Qantas. These additional measures, along with the cost of an independent expert and future audits, help to level the playing field for businesses who have complied with workplace laws,” Ms Parker said.