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Coffee shop pays compensation after wage-query sacking

29 July, 2014

The operator of a Kings Cross coffee shop has paid $2000 compensation to a casual foreign employee who was dismissed after she queried her pay rate.

The payment is part of an Enforceable Undertaking the employer has entered into with the Fair Work Ombudsman as an alternative to litigation.

Senan Pty Ltd, which previously operated a Gloria Jean's franchise at the Kings Cross Shopping Centre on Darlinghurst Road, has also issued a written apology to the former employee following an investigation by the Fair Work Ombudsman.

In early June last year, the casual employee asked Senan director Elaine (Lie Ming) Zhou if the flat rate of $12 an hour she was being paid for all hours worked was the correct rate of pay.

Two days later, Zhou cancelled the employee's next rostered shift and later sent her an email terminating her employment.

FWO investigation

The employee, a 26-year-old foreign worker in Australia on a skilled graduate visa, complained to the Fair Work Ombudsman, which later commenced an investigation, including wages and conditions of other staff.

The Fair Work Ombudsman found that Senan contravened the Fair Work Act when it cancelled her rostered shift and dismissed her for querying her employment conditions.

It also found that 15 other staff had been underpaid a total of more than $16,000 between June, 2011 and July, 2013 – including one employee who was owed $8200 back-pay.

The staff – including six young workers aged between 17 and 20, three foreign workers in Australia on Visas – had been underpaid their minimum rate of pay, casual loadings, weekend penalty rates and payment of accrued entitlements on termination.

The Fair Work Ombudsman also found Senan had breached workplace laws by failing to keep proper employment records.

As part of the Enforceable Undertaking, Senan has written to all affected employees offering its "sincere regret" and committing to a number of measures to ensure its future compliance with Commonwealth workplace laws.

It also agreed to pay $2000 to the employee whose job was terminated for economic and non-economic losses suffered as a consequence of the adverse action.

Zhou was also required to undertake workplace relations training on the rights and responsibilities of employers under the Fair Work Act, particularly in relation to discrimination in the workforce.

A reminder to all employers

Fair Work Ombudsman Natalie James says the Senan case should serve as a reminder to all employers, big and small, that employees have a lawful right to question their workplace entitlements.

She says the maximum court penalty for taking adverse action against an employee who asks about their pay rates or other working conditions is $10,200 for an individual and $51,000 for a company.

"We will take a dim view of employers who show the door to staff simply because they asked about their pay rates," James said.

"But we don't insist there is only one way to achieve compliance with workplace laws – education, positive motivators and deterrents are all important."

James says Senan and Zhou willingly co-operated with Fair Work inspectors to rectify her contraventions and put measures in place to ensure the mistakes are not repeated in future.

Enforceable Undertakings


Enforceable Undertakings were introduced by legislation in 2009 and the Fair Work Ombudsman has been using them to achieve strong outcomes against companies that breach workplace laws without civil court proceedings.

"We use Enforceable Undertakings where we have formed a view that a breach of the law has occurred, but where the employer has acknowledged this and accepted responsibility and agreed to co-operate with us and fix the problem," James said.

"Many of the initiatives included in EUs help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again.

"It also means we can resolve matters more speedily than if we proceed down a path towards litigation, often achieving outcomes, such as training sessions for senior managers, which are not possible through the Courts."

Copies of all Enforceable Undertakings are available on the Fair Work Ombudsman website.

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