Employment and Migration Blog

Success of the Fair Work Ombudsman’s anonymous reporting tool: Underpayers beware!

Posted by Anna Ford on 11 Apr 2019

Assisted by Maja Podinic

When the Fair Work Ombudsman (FWO) paid an unexpected visit to the Saffron Indian Gourmet Restaurant in the Gold Coast, they were interested in more than a meal.

Following the receipt of a tip made via the FWO's anonymous reporting tool, the Ombudsman opened an investigation into the alleged underpayment of the restaurant's workers, subsequently finding that 22 employees had indeed been underpaid amounts ranging from $143 to $9,457.

Whilst these underpayments had largely occurred due to the workers being paid flat hourly rates of between $15 and $18.50, it was also uncovered that the restaurant's employees had missed out on casual loading, as well as weekend and public holiday penalty rates which they had been entitled to under the Restaurant Industry Award.

In efforts to rectify the situation, the FWO has forced the restaurant's director and manager, Mr Sridhar Penumechchu, to enter into an Enforceable Undertaking (EU), which requires him to pay the relevant workers a combined total of over $50,000 through a payment plan.  Mr Penumechchu has also been required to make a $25,000 donation to the Gold Coast Community Legal Centre.

In addition to this, and in the interest of avoiding similar situations in the future, the restaurant has also been required to engage an external professional in order to:

  1. Complete two separate audits relating to both the pay and conditions of all Saffron Indian Gourmet Restaurant employees;
  2. Commission workplace relations training for all managers, payroll and human resource staff; and
  3. Demonstrate how the restaurant is complying with the Fair Work Act 2009.

All of the employees in question were found to be valid visa holders, including 14 international students.  It is an unfortunate reality that many migrants and international students often fear that their visas may be cancelled if they report an employer for unlawful workplace practices - a factor that can make them especially vulnerable to exploitation.

The FWO has highlighted that irrespective of a worker's citizenship or visa status, the Court Enforceable Undertaking imposed on the Saffron Indian Gourmet Restaurant should serve as a warning to employers that everyone has the same workplace rights, and that minimum wage rates still apply.  

Within the context of a separate investigation, the Fair Work Ombudsman's Sandra Parker recently noted that:

"Migrant workers may not seek help because of language and cultural barriers, concerns about visa status, or because they are unaware of their workplace rights...All workers in Australia have the same rights and protections at work, regardless of citizenship or visa status."

As migrants with language and cultural barriers are found to be less likely to contact the FWO with tips relating to unlawful workplace practices, the Ombudsman's introduction of the anonymous reporting tool currently supports reporting in 16 languages other than English.

This is not the first time that the anonymous reporting tool has helped the FWO uncover unlawful employers, with similar situations having been uncovered in both Melbourne and the Sydney suburb of Newtown in late 2018.  The popular King Street dining strip in Newtown had over 60 restaurants raided and similarly Degraves Street and Hardware Lane in Melbourne had at least 40 restaurants investigated after anonymous tips that workers were being underpaid.

Since mid-2016, over 20,000 employees and other individuals have anonymously reported employers to the FWO, with hospitality businesses making up over a third of all tip-offs.  
Compliance within the restaurant and cafe industry has remained a high priority for the Fair Work Ombudsman, and the anonymous reporting tool is proving to be a successful tool in the fight against unlawful workplace practices.

If you have a query relating to any of the information in this piece, or would like to speak with a lawyer in Coleman Greig's Employment Law team, please don't hesitate to get in touch today:

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