Payment of the wages to employees is a crucial aspect of the employment relationship. All employees have a right at law to be paid minimum wages and entitlements and getting this wrong can have serious consequences for employers.
In a recent case, a HR Coordinator of the popular restaurant chain Din Tai Fung (DTF) at its World Square location has been fined $105,084 for the role she played in underpaying 17 staff members. The underpayment totalled $157,025 and the associated total penalties in this matter totalled $4 million.
The Fair Work Commission (FWC) stated that the contravention of the law by DTF moved past a mere deliberate wrongdoing, but it was a ‘deceitful and unscrupulous’ arrangement. It was a scheme calculated and designed to underpay employees. The FWC found that the HR Coordinator went further than being a mere conduit for the underpayment but rather she specifically contravened the law.
In an attempt to conceal their wage theft practices, DTF hired visa holders as opposed to Australian citizens in order to reduce the risk of the underpayment being brought to the attention of the authorities. The FWC highlighted that it ‘is a notorious fact that foreign workers are particularly susceptible to exploitation’.
The payroll staff of DTF kept two copies of records relating to hours worked by staff. One copy of the records was the actual hours worked, whereas the other copy was augmented. The augmented records saw false rates of pay and understated hours of work documented.
It was discovered that, full time employees were to be paid 76 hours per fortnight, regardless of any additional hours being worked, cash payments were not to be included in payslips, and casual employees were made to look like they had worked less than they had actually worked.
The FWC stated that DTF’s conduct was ‘extremely serious’ with many of its breaches amounting to serious contraventions pursuant to section 557A of the Fair Work Act.
This case serves as a stern warning to human resource managers and coordinators as to the implications that their actions can have not only on the business, but to themselves as well.
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 3) [2023] FCA 201 (15 March 2023)
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2023] FCA 341 (9 April 2024)
This article was prepared with the assistance of Challita Tahhan*
If you have any questions or concerns please contact our Workplace Law Director Angela Backhouse on 1300 676 823