The operators-owners of a Gloria Jean’s café in Melbourne have been penalized a total of $110,500 for paying employees as little as $8 per hour.
The Federal Circuit Court fined Tsinman Fu and Ping Ostrovskih $17,500 and $13,000 respectively for underpaying 22 casual employees a total of $83,566 between July 2011 and April 2013. Fair Work inspectors found employees at Gloria Jean’s Caulfield were paid flat rates of between $8 and $10 per hour. The Court imposed a further $80,000 against Fu and Ostrovskih’s company, Primeage Pty Ltd.
The Fair Work Ombudsman (FWO) took legal action as a result of a complaint received by an employee.
The FWO reports individual underpayments ranged from $219 to $17,103.
Judge Grant Riethmuller, pointing to previous findings by inspectors, said Fu and Ostrovskih were “well aware of their obligations and the seriousness of those obligations.”
The court found that a “conscious decision was made to reduce wages when the business was not producing a sufficient income.”
Fu and Ostrovskih said that employees had not voiced their qualms relating to payment prior to FWO action, a factor Judge Riethmuller said is quite common.
“It is common for employees, particularly in industries where pay rates are low and workforces are largely casual, to be wary of expressing any dissatisfaction for fear that their employment will not continue,” Judge Riethmuller said.
Natalie James, Fair Work Ombudsman, said the Agency had given the employers opportunity to back-pay employees before taking action and added that Judge Riethmuller’s decision sends a strong message to other employers.
“We treat underpayments of young and overseas workers particularly seriously because they can be vulnerable if they are not fully aware of their workplace rights or are reluctant to complain,” Ms James said.
“Successful litigations such as this also benefit employers who are complying with workplace laws, because it helps them to compete on a level playing field.”
