$300,000 penalty for PappaRich franchisees

By Nick Hall | 22 Nov 2019 View comments

PappaRich franchisees in Sydney have copped over $300,000 in penalties, after the Fair Work Ombudsman (FWO) found that more than 150 staff members had been underpaid.

In a disturbing case of exploitation, the FWO revealed that 154 staff across the Malaysian, hawker-style chain’s Macquarie Park, Chatswood and Sydney CBD outlets had been duped a total of $74,000.

Between May and July 2017 employees were paid flat rates as low as $13 to $14.50 an hour, leading to underpayment of ordinary hourly rates, weekend and public holiday penalty rates, overtime rates and casual loadings.

PappaRich franchisees penalised

The Federal Circuit Court slammed the PappaRich franchisees with a hefty penalty, imposing a fine of $34,425 against Loke Cheng Wong. Wong serves as the manager/operator of the Macquarie Park outlet, having formerly operated both the Chatswood and CBD restaurants.

Further, companies PPR Ryde (NSW) Pty Ltd and Gateharvest Pty Ltd, of which Wong is a director and part-owner, were penalised $141,751 and $131,626 respectively.

Sandra Parker, Fair Work Ombudsman said inspectors discovered the underpayments, many of which were against migrant workers on student visas during surprise audits

“This penalty should serve as a warning to employers who choose to pay migrant workers unlawfully low flat rates rather than the applicable minimum award,” Parker said.

“Enforcing compliance with workplace laws in the fast food, restaurant and café sector and protecting vulnerable workers are priorities for the Fair Work Ombudsman. Franchisees are also on notice that they must pay all employees according to Australia’s lawful minimum pay rates.”

Underpayment and compliance concerns

In total, 73 employees who primarily worked at PappaRich Macquarie Park were underpaid $34,834, a further 42 employees at PappaRich Chatswood were underpaid $22,533, and 39 employees at the PappaRich Sydney CBD outlet were underpaid $16,633.

The PappaRich franchisees also failed to maintain accurate records and comply with the appropriate payslip standards.

Wong told the court that he was not aware of the relevant award, however Judge Driver was quick to shut the defence down.

“Mr Wong pleads ignorance of the relevant award requirements, but the evidence establishes that he was aware of the existence of an award and did not make further enquiries until the details of the award, and the consequential underpayments, were brought to his attention,” Judge Driver said.

According to the FWO, all underpayments have since been rectified in full.