Pizza Hut franchisee underpays 24 staff

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Inside Franchise Business: Fair Work investigations revealed staff underpaymentsA Pizza Hut franchisee has underpaid 24 employees a total of almost $22,000, according to the Fair Work Ombudsman.

Six employees of the Pizza Hut Hunter Street, Newcastle outlet brought the alleged underpayments to the notice of Fair Work and an investigation then found that 24 casual staff had been underpaid between November 2015 and May 2016.

Most of the employees were under 20 years of age, some were students from Pakistan and Kenya.

According to Fair Work, the flat, low rates paid by the franchisee undercut the minimum rates applicable under the Fast Food Industry Awards 2010, and an agreement covering the outlet’s staff.

Record-keeping and pay slip laws were also breached.

Store operator Bhavinjumar Patel and his business Ambeshwar Pty Ltd are rectifying the underpayments, and have entered into an Enforceable Undertaking with the FWO.

Last year the FWO identified widespread issues regarding delivery driver employment across the Pizza Hut network.

Fair Work Ombusdman Natalie James said there had been a lack of commitment to fix the issues by the franchisor.

“Based on the response so far, I am not confident that Pizza Hut head office is taking our concerns about non-compliance within its network seriously.

“If this non-compliance is replicated across the Pizza Hut network to the same extent of the delivery drivers, it would represent a significant failure to provide lawful wages and entitlements to the Pizza Hut workforce.”

However, Pizza Hut’s parent, the Pizza Pan Group, denies that it has so far failed to appropriately engage with the Fair Work Ombudsman in matters of this kind.

CEO Lisa Ransom said “We have met with Fair Work on several occasions and requested further information on any breaches or activity they may have identified in this 2015 audit, but are yet to receive anything of this nature from them.

“Now that Pizza Hut is aware of this situation we are working with this franchisee to rectify any concerns raised in the audit. We also look forward to an open and proactive channel of communication with the Fair Work Ombudsman,” said Ransom.

The new owners, who purchased the business from Yum! Restaurants in September 2016, have put in place extra measures to ensure that all franchisees fully understand their obligations as employers, Ransom said.

These include:

  • A 24-hour hotline for all employees and the franchisees

  • Access to a third-party payroll provider

  • Retraining on workplace employer obligations

Sarah Stowe

Sarah Stowe heads up the editorial in the Inside Franchise Business group at Octomedia. Sarah is a hands-on editor who has worked in consumer and B2B titles in UK and Australia and she has been editor of the View More...
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