Underpayment of superannuation and wage theft are so common in the hospitality industry that unions are calling on state governments to introduce tough new penalties that would make ripping off staff a criminal offence.
Two well-known restaurants – Bar Coluzzi in Sydney and Vue de Monde in Melbourne – have been accused of underpaying workers. On Monday Fair Work New South Wales issued a statement saying the owner of Bar Coluzzi, Tibor Vertes, had been penalised $9,720 while his company, Robit Nominees Pty Ltd, was fined a further $87,345.
An Italian cook who was sponsored by the cafe on a 457 skilled worker visa took the owners to court after being made to work 54 hours each week, despite her contract stating she would work a 40-hour week and be paid an annual wage of $56,000.
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Read moreThe restaurant also told her to repay $13,952 of her wages over a 15-month period from August 2014 until she resigned in November 2015, after telling her she had to pay the money back to the restaurant. She was told the payments were required to cover tax and superannuation contributions.
The acting fair work ombudsman, Kristen Hannah, said she was concerned that cashback schemes were being used by unscrupulous operators in an attempt to get around record-keeping laws and disguise serious underpayment of wages.
“It is hard to see a legitimate reason why an employer would require employees to be regularly paying back significant parts of their wage,” she said.
Vertes and Robit Nominees acknowledged to the federal court that the cook had agreed to the cashback payments because she was worried about losing her job and visa. Both admitted to breaking workplace laws and have back paid the money owed to her, which totalled $39,686.
The ABC reported that several staff at the fine-dining Melbourne establishment Vue de Monde and its now-closed sister establishment Cafe Vue were regularly required to work more than 50 hours each week despite contracts requiring a working week of 38 to 40 hours.
A former chef at Cafe Vue told the ABC he often worked an 80-hour week and was underpaid about $500 each week. Vue Group has denied the allegations.
Jess Walsh, the secretary of United Voice Victoria, the union representing hospitality workers, said the allegations that staff in one of Melbourne’s most expensive restaurants “could be ripped off by tens of thousands of a year” were appalling.
“If proven, it fits with a broader trend in hospitality of systematic wage theft,” she said. “We need to change the rules so wage thieves face real consequences.”
The union and Victorian Trades Hall Council has called on the state government to introduce a new section into Victoria’s Crimes Act that would criminalise wage theft. They want a new section added that would define wage theft as “a person who dishonestly withholds from an employee wages” and which could attract a maximum jail time of 10 years, and fines of up $190,000.
The secretary of the liquor and hospitality division of United Voice in NSW, Tara Moriarty, said staff underpayment was common in the hospitality industry, particularly among cafes and restaurants.
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Read more“Huge swathes of the industry are not even paid on the books,” she said.
“Our union has been campaigning for better right of entry laws and stiffer penalties for wage theft and underpayment of entitlements. Unpaid superannuation, in particular, is a ticking time bomb for the Australian economy.”
A recent report from the Centre for Future Work at the Australia Institute, found superannuation funds could be short by as much as $100bn due to wage theft.
“A large percentage of hospitality workers are under 35, and that’s when we know it’s critical to start putting super aside to compound. But as things stand, we’re going to see millions of hospitality workers forced rapidly on to the old-age pension when they should have been able to rely on their super,” Moriarty said.