The Fair Work Ombudsman has recovered $233,087 in unpaid wages for 353 workers following an investigation into 19 outlets of fried chicken chain Gami Chicken & Beer.

Prior to the pandemic, Fair Work Inspectors made surprise visits to 15 outlets in Melbourne, two in Sydney and two in Perth last year, after the regulator received large numbers of requests for assistance and anonymous reports from workers about potential breaches of workplace laws.

Many of the contacts came from young and migrant employees, who the Fair Work Ombudsman knows can be potentially vulnerable due to age, visa status and reliance on a local job for income.

The franchisor operated six of the outlets visited, with the remainder operated by franchisees. Inspectors interviewed employees, managers and store owners on the ground and checked employment records and payslips.

The regulator found that all 19 of the audited outlets had underpaid employees, and 15 were not meeting payslip and record-keeping obligations. The most common breaches found were underpaying penalty rates (33 per cent) and underpaying the minimum hourly rate (13 per cent).

Inspectors reported that the most common reason given by employers for non-compliance was a lack of awareness of all workplace obligations (68 per cent).

In total, $216,847 was recovered for 241 Melbourne workers, $6,879 for 43 Sydney workers and $6,779 for 55 Perth employees. Recoveries from individual businesses ranged from $1,129 for eight employees in a Sydney business to $49,069 for 17 employees in a Melbourne business.

Fair Work Ombudsman Sandra Parker said the high rates of non-compliance were unacceptable.

“Inspectors found that Gami Chicken & Beer operators had simply not prioritised meeting their lawful obligations to their workers,” Ms Parker said.

“A lack of awareness is not a valid excuse for a business to breach workplace laws. The FWO expects all employers to comply with workplace obligations and they should access our free tools and resources if they need assistance. Any employees with queries about pay should contact us.”

“Improving compliance among franchises in the fast food, restaurant and café industry, who employ many vulnerable workers, continues to be a priority for us,” Ms Parker said.

In response to the breaches, inspectors issued 18 compliance notices requiring employers to rectify breaches of the law, resulting in $233,087 back-paid to workers. There were 10 formal cautions, and nine on-the-spot fines with penalties totalling $25,410.

One business remains under investigation and may face legal proceedings.

The other businesses were advised that future breaches will likely lead to enforcement action. The FWO continues to enforce workplace laws in a proportionate manner during the pandemic.

BaptistCare NSW & ACT is back-paying employees more than $1 million and has entered into an Enforceable Undertaking (DOCX 110.8KB) (PDF 1.2MB) with the Fair Work Ombudsman in order to address its non-compliance.

The registered charity, which runs 17 residential aged care facilities as well as other related community services, self-reported that it underpaid more than 2000 current and former employees working in front line caring roles.

The affected employees were shift workers who were covered by the Baptist Community Services Age Care Enterprise Agreement 2011 and the BaptistCare NSW & ACT Aged Care Enterprise Agreement 2014.

As shift workers, under the Agreements the affected employees were entitled to an extra week of annual leave each year.

The underpayments were identified after the organisation discovered that it had failed to provide all the shift workers with the required additional annual leave, and the corresponding annual leave loading, since the implementation of the 2011 Agreement.

BaptistCare NSW & ACT underpaid 2146 workers a total of $1.279 million, which includes superannuation, between February 2012 and July 2018. Individual underpayments range from less than $5 to more than $4000.

While BaptistCare NSW & ACT has already back-paid the majority of workers, the Enforceable Undertaking requires the organisation to pay any outstanding amounts to former employees within 180 days, as well as a range of other obligations to ensure future compliance.

Fair Work Ombudsman Sandra Parker said that an Enforceable Undertaking was appropriate, as the organisation had cooperated with the investigation and demonstrated a strong commitment to rectifying and remedying all the underpayments owed to its workers.

“The Enforceable Undertaking commits BaptistCare NSW & ACT to stringent measures to protecting its employees, including funding external audits over the next two years and reporting to us on upgrades to its payroll and related systems,” Ms Parker said.

“This matter serves as a warning to all organisations that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and face not only a massive administrative and logistical exercise but the cost of a significant back-payment bill. You also risk having to undertake further audits that satisfy the FWO that you are continuing to pay your workers properly. Any employers who need help meeting their lawful workplace obligations should contact us.”

Under the Enforceable Undertaking, BaptistCare NSW & ACT will make a $40,000 contrition payment into the Commonwealth’s Consolidated Revenue Fund.

The organisation must fund an independent organisation to operate a Hotline for the next four months that employees can use to make enquiries in relation to their entitlements, underpayments or related employment concerns. Employees will have the option of making enquiries on a confidential basis. BaptistCare NSW & ACT is also required to display public, workplace and online notices detailing its workplace law breaches and apologise to workers.

The Fair Work Ombudsman has recovered $431,875 in wages for 487 underpaid workers after conducting surprise audits in the Geelong area as part of its series of regional university cities proactive investigations.

The FWO commenced the audits as part of a program of intelligence-led activity targeting high risk sectors, such as the takeaway food, restaurant, cafe and retail sectors, which commonly rely on vulnerable young workers such as university students. In the Geelong area, businesses were selected in suburbs close to tertiary institutions because FWO’s intelligence, such as anonymous reports, suggested they may have breached workplace laws.

Fair Work Inspectors investigated 132 businesses in the period prior to the COVID-19 pandemic and found 77 per cent of businesses (102) failed to comply with workplace laws. Of those businesses in breach, more than half (52 per cent) both underpaid staff and breached pay slip or record-keeping obligations.

The most common breaches identified were failures to correctly pay penalty rates, followed by underpayments of the minimum hourly wage.

The most common reason given for non-compliance was a lack of awareness of workplace obligations (55 per cent). Wage back-payments by businesses ranged from $3 up to $52,558.

Fair Work Ombudsman Sandra Parker said the low rate of compliance was disappointing.

“The level of breaches of workplace laws identified in these areas and sectors of Geelong is unacceptable, particularly the breaches involving young workers and students who we know are potentially vulnerable due to their age, visa status and reliance on local jobs,” Ms Parker said.

“A lack of awareness is not a valid reason to breach workplace laws. The FWO expects all employers to comply with workplace obligations and to use our wealth of free tools and resources if they need help. Workers with concerns should contact us.”

The FWO has prioritised compliance in the fast food, restaurant and cafe industry and has a suite of interactive tools to help employers and employees. This includes information on base rates and penalty rates.

“Employers should regularly use our free pay calculator to check they’re doing the right thing by their staff, and access other resources including the Small Business Showcase,” Ms Parker said.

In response to the breaches, the FWO issued seven contravention letters, 14 formal cautions, 61 infringement notices (with total penalties of $110,460), and 65 compliance notices. These compliance notices led to $398,818 being back-paid to 445 employees.

One business remains under investigation for serious non-compliance and may face legal proceedings. Other non-compliant businesses were advised that future breaches will likely lead to enforcement action. The FWO continues to enforce workplace laws in a proportionate manner during the pandemic.

The FWO has previously audited businesses in Albury/Wodonga, Wollongong and Ballarat as part of its rolling regional university cities proactive investigations.