Crust Pizza penalised by Fair Work Ombudsman for discrimination

See the full statement here.

The Fair Work Ombudsman issued a media release about a Crust franchisee said to have severely underpaid migrant workers:

The Fair Work Ombudsman has secured $104,000 in penalties against the operators of a Crust Gourmet Pizza franchise outlet in Hobart after they discriminated against four migrant workers by paying them much less than Australian employees.

QHA Foods Pty Ltd, which operates the Crust outlet on Elizabeth Street in North Hobart, has been penalised $80,000 and two of the company’s directors and shareholders, Anandh Kumarasamy and Haridas Raghuram, who were involved in managing the outlet, have each been penalised an additional $12,000, in the Federal Circuit Court.

QHA Foods, Mr Kumarasamy and Mr Raghuram admitted committing several breaches of workplace laws, including the provision of the Fair Work Act that makes it unlawful to discriminate against employees on the basis of their nationality.

The discrimination contravention relates to three Bangladeshi nationals and one Indian national who were underpaid a total of $9926 for work performed at the Crust Hobart outlet between January and July 2016. They were international students at the time.

The business operators, who are Indian migrants, knew the four workers were entitled to minimum Award pay rates but chose to discriminate against them by paying them significantly less than Australian employees.

Fair Work Ombudsman Sandra Parker said that Fair Work Inspectors investigated the matter after receiving a request for assistance from a migrant worker.

“It is particularly concerning that this matter involved business operators breaching the rights of workers from within their own migrant community. Singling out migrant workers for underpayment is unacceptable conduct that will not be tolerated by us or the Court,” Ms Parker said.

“Discrimination against workers on the basis of national extraction or race can be a driver behind workplace exploitation. All employees have the same rights regardless of visa status and we encourage anyone with concerns to contact the Fair Work Ombudsman.”

The four workers discriminated against performed duties including making and garnishing pizzas, delivery driving, serving customers and cleaning.

The workers were paid a flat hourly rate of $12 for all hours worked, plus $1 per pizza delivery, resulting in significant underpayment of the ordinary hourly rates, casual and evening loadings and penalty rates for weekend and public holiday work they were entitled to under the Fast Food Industry Award.

The four workers were also paid in cash, were required to deliver pizzas to more distant locations than Australian employees and were not provided with pay slips, in breach of workplace laws.

In contrast, Australian employees at the Crust Pizza outlet were paid higher minimum rates of pay and penalty rates, including being paid penalty rates for weekend and public holiday work and a cents-per-kilometre rate for deliveries.

Six of the adult Australian employees were paid ordinary rates of more than $18 an hour and three were paid penalty rates of up to $46.31 on public holidays. The Australian workers were allegedly also paid into their bank accounts and provided with pay slips.

However, the incorrect application of some provisions in the Award resulted in 10 Australian workers being underpaid a total of $6252. The foreign workers and all Australian workers have been back-paid in full.

QHA Foods, Mr Kumarasamy and Mr Raghuram also breached workplace laws during the investigation by providing inspectors with records that had been altered by the deletion of the record of hours worked by the four overseas workers.

Judge Barbara Baker said the four migrant workers were vulnerable due to their limited understanding of Australia’s workplace laws and the conduct towards them was deliberate.

Judge Baker found that the need for general deterrence in the fast food industry was a significant factor in determining the penalties.

In addition to the penalties, Judge Baker ordered QHA Foods to commission workplace relations training for managerial staff.

It is the second time the Fair Work Ombudsman has secured penalties against an employer for discriminating against employees on the basis of their nationality, with the first matter also relating to migrant workers in Tasmania.

It is also the third time the Fair Work Ombudsman has commenced legal action against the operators of a Crust outlet.

Last year, the Fair Work Ombudsman commenced legal action against a Crust franchisee in Melbourne, alleging it underpaid seven employees a total of $35,725. This matter is before the Federal Circuit Court.

In 2015, the Fair Work Ombudsman secured a penalty of $3825 against the former operator of a Crust outlet at Maroubra, in Sydney for refusing to reimburse eight employees who were underpaid almost $26,000.