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This article outlines a case involving La Porchetta, a restaurant in Melbourne. The focus is on underpayment of wages and the issue is relevant to all employers.

Two companies operating two outlets of the franchise La Porchetta in Melbourne have been fined by the Fair Work Ombudsman and forced to back pay a total of $334,818 for giving pizza and soft drink to employees in lieu of wages. The owner of the two companies was also personally fined a further $55,803.

A number of the employees were young, with some on apprenticeships and traineeships for which the two companies had been paid Commonwealth benefits.

Underpayments made were caused by incorrect flat rates instead of differing Award and penalty rates being applied, not being paid minimum hours and underpayment of leave entitlements. Lack of cooperation during the Ombudsman's investigation and failure to keep records were also factors in the decision handed down.

The decision

This decision sends a strong and clear message of intolerance towards the exploitation of the young and vulnerable, the safety net of employer's obligations, personal responsibility of Directors of companies or managers and the effective enforcement of same.

Preventative action in the future

As a consequence of the findings, the La Porchetta group as a whole has taken action to ensure that such breaches do not occur again, entering into a pro active Compliance Deed with the Fair Work Ombudsman that requires it to self-audit stores, provide new franchisees with employment induction training and employment packs covering key aspects of workplace laws, provide annual wage updates and appoint an employee liaison office to deal with complaints.