The Fair Work Ombudsman has started legal action alleging workers in a restaurant chain in Sydney, Brisbane and the Sunshine Coast were underpaid almost $1 million.
Facing the Federal Circuit and Family Court are Sabcha Pty Ltd, which employed staff to work across 11 P’Nut Street Noodles restaurants, and one of the company’s managers and directors, Ankur Sehgal.
The Fair Work Ombudsman alleges Sabcha Pty Ltd underpaid 118 workers a total of $976,463. Alleged individual underpayments range from $70 to as much as $79,000.
But Mr Sehgal told Sunshine Coast News that FWO has misunderstood the enterprise agreement and the company was committed to correctly paying employees.
The FWO stated that a large majority of the allegedly underpaid staff were migrant workers who were in Australia at the time on sponsored-work, student and other visas from countries including Thailand, Philippines, Vietnam, India and Indonesia.
They worked as cooks, front-of-house-service staff, kitchen hands and in other roles.
Fair Work inspectors stated that they discovered the alleged underpayments when they conducted surprise audits after a number of underpayment allegations were made through the Fair Work Ombudsman’s anonymous report tool.
It is alleged that the primary cause of the alleged underpayments was Sabcha paying staff unlawfully low flat rates, resulting in underpayment of minimum wage, penalty and overtime rates. A split-shift allowance and leave entitlements were allegedly also underpaid.
The Fair Work Ombudsman alleges Sabcha also breached record-keeping and pay slip obligations under the Fair Work Act, including by providing false or misleading time-and-wages records and pay slips to inspectors.
It is claimed that some of the alleged breaches by Sabcha, relating to providing false and misleading information to the FWO and underpayment of annual leave entitlements, are serious contraventions under the Protecting Vulnerable Workers laws because they were committed knowingly and systematically.
Serious contraventions attract a ten-fold increase in available maximum penalties.
It is alleged that Mr Sehgal was involved in the underpayment of leave entitlements and all pay slip and record-keeping breaches.
Underpayments allegedly occurred between April 2019 and May 2021. The large majority, $632,592, related to employees in Sydney, where seven of the stores were located. The four Queensland stores had alleged combined underpayments of $343,871.
But Mr Sehgal stated that the FWO was mistaken.
“We respect FWO and their inspectors but they have misinterpreted an approved EA (enterprise agreement),” he said.
“Anyone who knows our business knows that transparency is a core value and we are fully committed to making sure that all our people are paid properly.”
Fair Work Ombudsman Anna Booth said allegedly underpaying vulnerable migrant workers and knowingly or recklessly providing false records to the FWO was unacceptable.
“We are committed to using all powers at our disposal to protect vulnerable workers in this country, and to ensure that employers who deliberately or systematically breach the law face significant consequences,” she said.
“The alleged scale of underpayment across the P’Nut Street Noodles chain was concerning.
“Record-keeping is a bedrock obligation for any employer. We allege Sabcha failed to provide both its employees and our inspectors the accurate pay slips the law demands, instead providing false or misleading records.
“Employers should be aware that taking action to protect migrant workers and improve compliance in the fast food, restaurants and cafés sector are priorities for the FWO.
“Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”
The FWO is seeking penalties in court. For the alleged serious contraventions, Sabcha Pty Ltd faces penalties of up to $666,000 per breach.
For the other alleged contraventions, Sabcha Pty Ltd faces penalties of up to $66,600 per breach and Mr Sehgal faces penalties of up to $13,320 per breach.
The regulator is also seeking an order requiring Sabcha Pty Ltd to back-pay all workers in full, plus interest and superannuation.
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A directions hearing is listed in the Federal Circuit and Family Court in Sydney on April 28.
The Fair Work Ombudsman filed 146 litigations against employers involving visa holder workers, and secured nearly $23 million in penalties in cases that have included visa holder workers, in the seven financial years to June 2024.
Employers and employees can visit fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance. An interpreter service is available on 13 14 50. Employees can also seek information from their employer or their union, if they are a union member. The FWO also has an online anonymous report tool, including options to report in languages other than English, and information for migrant workers is available at our visa holders and migrants webpage.
