Fines amid fresh Subway franchise underpayment revelations

EWIN HANNAN

OCTOBER 1, 2019

The Australian

Another 18 Subway franchisees have been caught underpaying 167 workers more than $81,000.

The results of the latest probe by the Fair Work Ombudsman mean Subway franchisees in three States have been exposed underpaying workers nearly $150,000 over the past two financial years.

Half of the underpaid workers were either young or from a migrant background.

But financial penalties imposed on the offending franchisees total just $5880, after nine on-the-spot fines for record keeping and pay slip breaches were issued by the regulator.

Fair Work Ombudsman Sandra Parker said on Tuesday that $81,638.82 in unpaid wages had been recovered for 167 current and previous employees following investigations into 22 Subway franchisees.

Inspectors targeted Subway franchisees in New South Wales, Queensland and Victoria following requests for assistance from employees and anonymous tip-offs about potential breaches of federal workplace laws.

Franchisees failed to pay minimum wages, casual loadings, holiday and overtime rates, and did not issue proper payslips or keep proper employment records.

As well as the nine fines, inspectors issued seven compliance notices requiring employers to rectify breaches of the law, nine formal cautions putting franchises on notice about future non-compliance.

“The FWO is very concerned by the rates of non-compliance we have seen in the Subway franchise network and has a number of ongoing lines of inquiry into their operations,” Ms Parker said.

“Half of the underpaid Subway employees were young workers or from a migrant background, which can make them particularly vulnerable to exploitation. For many of these workers, it might be their first job and they could be unaware of their workplace rights or scared to raise issues with their boss.”

She said franchisors, especially in the fast food sector, were a priority for the regulator.

“Franchisors can be held legally responsible if their franchisee stores don’t follow workplace laws,’’ she said.

“They must take reasonable steps to prevent this occurring. The community expects head companies to assure themselves that all the stores in their franchise network are paying workers their correct wages and entitlements.”