Back to Previous

Hungry Jack’s faces court for staff underpayment

Sarah Stowe

The Fair Work Ombudsman has launched a prosecution against fast food franchise, Hungry Jack’s, for allegedly underpaying its employees more than $665,000.

Documents lodged in the Federal Magistrates Court in Melbourne allege that the company underpaid 693 of its Tasmanian employees a total of $665,695 between March 2006 and August 2008.

The employees, including more than 70 trainees, worked at six stores in Devonport, Glenorchy, Hobart, South Hobart, Launceston and Mowbray.

Hungry Jack’s is alleged to have paid the workers according to rates contained in an agreement it made with the Shop, Distributive & Allied Employees’ Association. But because the agreement was never officially registered with the relevant industrial tribunal for approval the Fair Work Ombudsman claims the employees should therefore have been paid according to rates contained in the relevant Tasmanian awards.

By failing to register the agreement, it is believed that Hungry Jack’s underpaid employees’ minimum hourly rates, penalty rates for weekend, public holiday and overtime work, annual leave entitlements, minimum engagement pay and casual loading.

While the alleged underpayments averaged $1,000 per employee, the Fair Work Ombudsman says more than 30 were underpaid more than $4,000 each and the highest individual underpayment was $10,000.

Fair Work Ombudsman executive director, Michael Campbell said “We expect large corporations to exercise their workplace responsibilities, particularly when they employ large numbers of vulnerable workers who are unlikely to know or exercise their workplace rights.”

The Ombudsman alleges Hungry Jack’s committed at least a dozen breaches of workplace law in relation to the alleged underpayments. The maximum penalty is $33,000 per breach. It is also alleged that the company committed a further breach by failing to keep employment records in accordance with workplace laws.

The alleged underpayments were first discovered when Fair Work inspectors audited Hungry Jack’s in 2007. After conducting its own assessments, in April last year the franchise back-paid more than 800 current and former staff almost $904,000 – more than the $665,695 which inspectors calculated was owing.

In a statement, Hungry Jack’s CEO, Tim Tighe, said the company has co-operated fully with the Fair Work Ombudsman to identify and rectify all underpayments to its employees in Tasmania. “As one of Australia’s largest employers, Hungry Jack’s greatly values its relationships with employees and as such takes its responsibilities to them seriously. Steps have been taken to ensure that such a situation does not occur again,” he said.

The date for a first directions hearing is 1 July.