Burger bar fined over $300K for exploiting workers

A former Melbourne burger bar operator has received penalties of over $300,000 from the Federal Circuit Court for exploiting young and overseas workers.

Fair Work Ombudsman Natalie James suggested the restaurant, cafe and fast food sector was particularly bad for mistreating employees, accounting for 29% of litigations in 2015–16 and 2016–17.

“It is deplorable that nearly one-third of the most serious cases that end up in court involve this one sector,” James said.

Burger Buzz owner Todd Patrick Buzza has been penalised $51,735, while his company, Rum Runner Trading, has been penalised an additional $258,495.

This is not the first time the Fair Work Ombudsman has addressed the company’s treatment of its staff. In June 2016, legal action was taken after Buzza underpaid seven workers a total of $7113 and refused to backpay them for work performed in the Brunswick and West Melbourne Burger Buzz outlets, which are now closed.

He ignored warnings and underpaid a further five Brunswick employees a total of $7513, which resulted in further legal action in December 2016.

Most of the exploited workers were young and from overseas — such as university students and those holding 417 working holiday visas — working for short periods of between five days and 11 weeks. Five of the employees were paid nothing, and those who were paid received less than half of their lawful entitlements.

The underpayments resulted in difficulties in affording rent, food and paying bills, with workers stating they were forced to borrow money from family members, move home and even sell belongings.

Judge Suzanne Jones said Buzza and his company had displayed “a blatant disregard for their obligations” and had “shown no genuine contrition or remorse”. She highlighted the need to deter hospitality industry employers from similar conduct in the future.

“When considering the question of general deterrence, a penalty should be fixed with a view to ensuring that it is not regarded by the respondents and others ‘as an acceptable cost of doing business’, and should be likely to act as a deterrent to like-minded persons or organisations.”

This behaviour is particularly worrying considering businesses have easy access to information regarding workplace laws and employer obligations, and many choose to ignore advice.

“Even if you haven’t heard of us, if you google ‘wage rates’ you are immediately directed to our Pay Calculator. You don’t have to try very hard to at least get on the pathway to compliance. Too often, though, we find businesses that have not even made the most basic of inquiries — or worse, have been the beneficiary of tailored advice from the Fair Work Ombudsman or some other adviser and chosen to ignore it,” said Jones.

She noted that many businesses fail to understand the seriousness of these offenses. As of September 2017, the Fair Work Amendment (Protecting Vulnerable Workers) Act introduced higher penalties of up to $630,000 per contravention for a company and $126,000 per contravention for an individual in relation to serious breaches of work laws. Failing to keep employee records and knowingly making false or misleading employee records will also result in significant fines and legal action.

However, the high number of offences suggests that the heart of the problem is the general culture of merely doing what others do. According to James, focusing on changing the culture of non-compliance will ultimately help bring about sustained behavioural change on workplace laws, and this begins with industry leaders setting an example.

“Unless industry leaders take action to overhaul a culture where underpayment of wages has become normalised, this sector and its individual businesses will increasingly attract the attention of law makers and find itself in the middle of media storms,” James said.

Employers and employees seeking assistance can visit www.fairwork.gov.au for more information.

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