MOS burger chain underpaid workers by more than $1m

EWIN HANNAN
DECEMBER 6, 2019

The Australian

The Australian arm of the Japanese MOS Burger chain underpaid 285 Queensland workers $1.12 million over seven years but will not be prosecuted by the Fair Work Ombudsman or be required to make a contrition payment.

MOS Burger Australia has now backpaid the former and current employees who worked across the company’s six stores in Brisbane, Surfers Paradise, Southport, Broadbeach, Mt Gravatt and Sunnybank between 2011 and 2018.

The company paid an additional seven per cent compensation to the workers and entered into a court-enforceable undertaking requiring it to engage external auditors.

Fair Work Inspectors found the company had paid unlawfully low flat rates to workers, many of them visa holders and young workers, and misclassified some employees as part-time when they were casuals.

Breaches of workplace laws included failures to pay ordinary hourly rates, casual loadings, and penalty rates for night, weekend and public holiday hours.

Fair Work Ombudsman Sandra Parker highlighted the company’s “prompt action”.

“We considered that a court-enforceable undertaking was an appropriate enforcement tool as the company conducted a comprehensive audit of its pay records from when it commenced trading in Australia, fully back-paid workers and overhauled its processes to comply with workplace laws.”

“Court-enforceable undertakings are serious instruments with extensive commitments from companies. We will monitor compliance with each commitment and won’t hesitate to take court action if they are not upheld. This matter is a warning to all employers that if they don’t get workplace compliance right from the beginning they can be left with extensive and expensive consequences.”

Meanwhile, 75 per cent of restaurants, cafés and fast food outlets audited across four capital cities have been found to have breached workplace laws, leading to $316,674 in backpayments to 608 workers.

Inspectors audited 156 businesses in Adelaide (Gouger Street, Grote Street, Rundle Street and The Parade), Melbourne (Swanston St, Lygon Street, Sydney Road and St Georges Road), Sydney (King Street in Newtown) and Perth (James Street and Francis Street in Northbridge).

Compliance rates varied across the precincts, with 85 per cent of Melbourne businesses found to be non-compliant with workplace laws; 62 per cent of Adelaide and Northbridge businesses; and 54 per cent of Newtown businesses.

The most common breaches related to the underpayment of minimum hourly rates (34 per cent); failure to provide pay slips in the prescribed form (15 per cent); and underpayment or non-payment of weekend penalty rates (11 per cent).

Mr Parker said it was “disappointing that we uncovered such large amounts of underpayments in popular food districts across Australia, with some of the community’s most vulnerable workers underpaid, but unfortunately it’s not surprising”.

“Many of the breaches we saw resulted from businesses not understanding their lawful obligations to their workers. This is no excuse for underpaying employees so I’d suggest that employers invest in workplace law compliance before we come knocking,” she said.

“Reducing worker exploitation in the fast food, restaurant and cafe sectors is a priority for the Fair Work Ombudsman. We’re working hard to change the culture of underpayment across this sector and businesses are firmly on notice. Any workers with concerns should contact us.”

In response to the breaches, the FWO issued 46 contravention letters, 38 formal cautions, 34 infringement notices ($32,430 in fines for pay slip and record-keeping breaches), and 13 compliance notices (requiring $83,058 to be reimbursed to 108 employees).