Rising cafe chain cops fine from Ombudsman

Degani's outlet at Loganholme. Image: Facebook

Degani’s outlet at Loganholme. Image: Facebook

The Fair Work Ombudsman has fined Degani Bakery and Cafe after finding breaches of compliance activity at 15 outlets, including underpayment and record keeping breaches.

The FWO’s activity involved auditing 14 Degani outlets in Melbourne and two in Rockhampton after receiving a high number of requests for assistance, and found just one outlet to be compliant with workplace laws.

The audits resulted in the FWO recovering a total of $44,165 for 86 underpaid workers. The Ombudsman issued 10 formal cautions, eight compliance notices and five on-the-spot fines.

Fair Work Ombudsman Sandra Parker said under or non-payment of penalty rates was the most common issue identified by inspectors, as well as underpayment of base rates of pay.

“We uncovered issues with record-keeping at several Degani outlets that hindered our ability to determine exactly how much back-pay the employees were owed,” said Parker.

“Unfortunately, Degani’s failure to meet basic workplace requirements is common throughout the hospitality industry.”

One in ten disputes resolved by FWO in 2016-17 involved a restaurant, cafe or takeaway food outlet, and nearly one third of the most serious cases taken to court involve this sector.

“Recent law changes mean franchisors can now be held liable for workplace breaches by businesses in their networks,” said Parker.

“This report reinforces the need for industry-wide cultural change and hospitality leaders should work with the FWO to support compliance.”

In February, the FWO commenced court action against a Degani outlet in Greensborough for allegedly using false records to conceal more than $12,000 in underpayments to workers. The matter remains before the court.

In November, the FWO entered into an Enforceable Undertaking with the operators of a Degani outlet in Mornington, south of Melbourne, who underpaid workers almost $10,000.

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