16 August 2021

The Fair Work Ombudsman has secured court penalties of $170,000 against the operator of a Brisbane café and its director for underpayment of staff and partially paying them in food and drink.

The Federal Circuit Court has imposed a penalty of $130,000 against 63 Racecourse Rd Pty Ltd, which operated a café trading as ‘Café 63 Racecourse Rd’ in Hamilton Central.

The company’s sole director and shareholder, Mr Hamish Russell Watson, was penalised $40,000.

The company agreed that it underpaid 33 employees, mostly visa holders, who worked as cooks, kitchen attendants and food and beverage attendants. Breaches of workplaces laws occurred in two separate periods: July-August 2017, and November 2017 to January 2018.

In the first period, employees at Café 63 Racecourse Rd were underpaid a total of $36,653 for underpayments of various entitlements under the Restaurant Industry Award 2010, including the minimum hourly wage, casual loading, and penalty rates for weekends, public holidays and overtime.

In the second period, employees were paid according to Individual Flexibility Agreements (IFAs) that provided for flat hourly rates and ‘allowances’ instead of the various penalty rates and overtime rates under the Award. One of the ‘allowances’ in the IFAs was the right to eat meals and drink beverages up to the value of $35 per day, leading the company to breach its obligation under the Fair Work Act to pay employees in money.

The company also breached workplace laws relating to various requirements that must be met when entering into IFAs, including failing to detail how individual employees would be better off overall than under the Award and, for some IFAs, failing to record the agreement in writing. The company also failed to enter into written part-time agreements with its part-time employees.

Fair Work Ombudsman Sandra Parker said that improving compliance in the fast food, restaurant and café sector and protecting migrant workers remain priorities for the FWO.

“The penalties in this matter make clear that paying flat rates that undercut Award entitlements, and failing to follow the important laws for individual flexibility arrangements or part-time agreements will not be tolerated.”

“We treat matters relating to migrant workers particularly seriously, and are also focused on taking action to improve compliance in the fast food and café sector, where many such vulnerable workers are employed.”

“All workers in Australia have the same rights at work regardless of nationality or visa status. Anyone with concerns about their pay or entitlements should contact us,” Ms Parker said.

Mr Watson was involved in all of the company’s breaches, except two requirements relating to entering into IFAs.

In the penalty judgment, Judge Michael Jarrett said the breaches occurred despite Mr Watson having previously received information from the Fair Work Ombudsman “to enable him to clearly identify the [company]’s obligations”.

“The contraventions relating to the first period and the second period are both deliberate and serious and represent a significant departure from the standards of conduct expected from employers and those that control them,” Judge Jarrett said.

Judge Jarrett said the arrangement for employees to be partially paid in food and drink was “abhorrent” and the company and Mr Watson “used the opportunity to employ individual flexibility arrangements to avoid the protections offered to the [company]’s employees by the Restaurant Award”.

The Fair Work Ombudsman investigated 63 Racecourse Rd Pty Ltd after receiving anonymous reports. The company made backpayments last year.

The Fair Work Ombudsman has an agreement with the Department of Home Affairs, called the Assurance Protocol, where visa holders with work rights can ask for our help without fear of their visa being cancelled. Information and conditions are available at our webpage for visa holder workers.

Information for the fast food, restaurant and café sector is available at www.fairwork.gov.au/frac.

Last year, the Federal Circuit Court imposed a total $139,800 penalties against the operators of the separate Café 63 Chermside at the Westfield Chermside shopping centre in Brisbane. Total penalties included a $95,000 penalty imposed against Timi Trading Pty Ltd and a penalty of $4,800 for Mr Watson for his involvement in one contravention by Timi Trading Pty Ltd.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. A free interpreter service is available on 13 14 50. Anonymous reports can be made in English and 16 other languages at www.fairwork.gov.au/tipoff.

Follow the Fair Work Ombudsman @fairwork_gov_au or find us on Facebook www.facebook.com/fairwork.gov.au .

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Media inquiries:

Matthew Raggatt, Assistant Media Director (A/g)
Mobile: 0466 470 507
matthew.raggatt@fwo.gov.au