Recent Underpayment Case Results in Substantial Penalties

The FWO has secured a total of $204,000 in penalties against the operators of Riddhi Siddhi Pty Ltd (“the Company”), which operates ‘Vege Rama’ – a Brisbane fast food outlet, after the use of false records to disrupt their investigation.

 

Background

 

The FWO investigation into the business was first launched in November of 2020, after the Ombudsman received a request for help from a Nepalese visa holder who was working as an occasional kitchen helper from April 2018 to August 2019. The employee was aged in his twenties at the time, worked between 50 and 60 hours per week and was paid $11 to $13 an hour. These amounts clearly fall well below the national minimum wage, which is now increasing to 812.60 per week or $21.38 per hour, as of 1 July 2022.

It was found that the Company breached the Fair Work Act 2009 (Cth) by providing false and misleading records and pay slips to Fair Work Inspectors, incorrectly showing the hours worked by the employee, and that the employee was paid above award wages. The company also failed to comply with a Compliance Notice which required it to calculate and back-pay the worker’s entitlements. Ruchika Sharma, the company director, was identified to be involved in the provision of these matters.

 

The Decision and Outcome

 

Following a lengthy court battle, the Federal Circuit and Family Court have imposed a $185,000 penalty against the Company and an additional $19,000 personal penalty against the Company’s owner.

 

Judge Vasta identified these actions as “an attempt to obfuscate the truth and to ensure that any proper investigation was never able to be pursued”. The Judge maintained “this was a deception that went to the heart of the fair industrial and employment system of this country.”

 

Takeaway

 

This case serves as a cautionary tale for companies, which demonstrates that “falsifying records and providing them to the Fair Work Ombudsman is extremely serious conduct and it will be met with the strongest possible enforcement action,” Ms Parker, the current FWO said.

 

Furthermore, Judge Vasta described the conduct as “extremely difficult to detect”. Hence, “employers also need to be aware that taking action to protect vulnerable workers, including visa holders, and improve compliance in the fast food, restaurant and café sector continues to be priorities for the FWO.”

 

 

If you have any question about managing wage underpayment or award classification cases more generally, please do not hesitate to contact Nick Stevens, Daphne Klianis or Josh Hoggett.