AAP Finance

Fair Work sting uncovers rife underpayment

By AAP Newswire

More than $300,000 has been returned to cafe and restaurant workers after a tactical Fair Work sting at four capital city food hotspots found 75 per cent of businesses were breaking the law.

The Fair Work Ombudsman audit of 156 fast food businesses and cafes across popular food districts - including Melbourne's Swanston and Lygon streets and King Street in Newtown - uncovered various breaches of workplace law following anonymous tip offs and requests for assistance from employees.

Site visits by inspectors were coordinated to minimise the potential for forewarning in an industry Fair Work say is rife with ongoing non-compliance.

The sting comes after the ombudsman's recent tackling of high-profile figures including George Calombaris, Heston Blumenthal, Neil Perry and Guillaume Brahimi, with Calmobaris alone found to have underpaid 500 current and former workers $7.8 million.

The regulator, which also targeted major food precincts in Adelaide and Perth, said the most common breaches uncovered in the operation were underpayments and a failure to provide payslips in the prescribed form.

A total 608 employees will receive backpayments totalling $316,674, with the audit revealing 75 per cent of businesses were breaking the rules in one way or another.

That includes 85 per cent of Melbourne businesses inspected.

In response to the breaches, Fair Work issued 46 contravention letters, 38 formal cautions, and 34 infringement notices totalling $32,430 in fines for payslip and record-keeping breaches.

There were and 13 compliance notices requiring $83,058 to be reimbursed to 108 employees.

The compliance activity was the second in a series targeting 'cheap-eat' and entertainment strips.

Fair Work said these precincts are characterised by low entry barriers for new businesses, low or no union coverage, exploitation of young and migrant workers, and long trading hours over seven days of the week.

In the first activity, Fair Work found 81 per cent of businesses in Victoria Street Melbourne, were non-compliant.

Fair Work Ombudsman Sandra Parker said the underpayments were disappointing but not surprising.

"Many of the breaches we saw resulted from businesses not understanding their lawful obligations to their workers," Ms Parker said.

"This is no excuse for underpaying employees so I'd suggest that employers invest in workplace law compliance before we come knocking."

Inspectors audited businesses in Adelaide's Gouger Street, Grote Street, Rundle Street and The Parade, as well as Swanston Street, Lygon Street, Sydney Road and St Georges Road in Melbourne.

James Street and Francis Street were targeted in Perth's Northbridge, while King Street in Newtown copped attention in Sydney.

The results of an audit of eateries at Hobart's Battery Point, Elizabeth Street, and Constitution Dock are being finalised.

In a separate announcement, Fair Work said the Australian arm of Japanese burger chain MOS will back-pay $1.12 million to 285 former and current Queensland workers and will face ongoing scrutiny of its workplace practices.

MOS Burger has entered into a court-enforceable undertaking after an investigation found contraventions of the Fast Food Industry Award.