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A Victorian Coffee Club outlet breached record-keeping and payslip laws, including making false time and wages records.
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Cafe fined $115k for underpaying staff, falsifying records
21 March 2023
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The Fair Work Ombudsman (FWO) has secured a total of $115,603 in penalties against the former operators of a Coffee Club outlet in Victoria after they were found to have deliberately underpaid two young workers and falsified records.
The federal court imposed a $96,336 penalty against JMSL Pty Ltd (JMSL) – the former franchisee of the Coffee Club outlet in the Westfield Geelong shopping centre – as well as a $19,267 penalty against Edison Peng, the company’s sole director.
The FWO investigated after receiving requests for assistance from the affected workers and found that the two workers, then aged 19 and 20, were underpaid a total of $15,412 between May 2016 and November 2018.
During the investigation, Mr Peng was found to have provided a total of 66 false and misleading records to Fair Work inspectors that overstated the rates the two workers were paid.
The company and Mr Peng later admitted to breaching record-keeping and payslip laws, including making false time and wages records and providing them to the FWO knowing they were false.
Investigators found the two affected workers were paid flat rates as low as $15 per hour, which resulted in the underpayment of hourly rates, casual loadings as well as weekend and public holiday penalty rates which they were entitled to under their award.
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The FWO revealed that Mr Peng had previously been put on notice by the ombudsman regarding his obligations under workplace laws during a previous underpayment investigation.
The ombudsman said JMSL and Mr Peng only back-paid the workers fully after it had commenced legal action.
Fair Work Ombudsman Sandra Parker said there would be significant consequences for employers deliberately breaching workplace laws.
“Deliberate falsification of records and the payment of low, flat rates that undercut Award entitlements is completely unacceptable conduct,” said Ms Parker.
“The exploitative conduct we have seen in this matter will not be tolerated in any Australian workplace.”
In imposing the penalties, Judge Caroline Kirton found the workers had suffered significant loss and that JMSL and Mr Peng took deliberate steps to falsify records in an attempt to conceal the underpayments.
“The deliberate provision of false information to a regulator is inexcusable and will be met with a strong penalty outcome,” said Judge Kirton.
This was the second time the FWO had taken legal action against a Coffee Club franchise, having secured more than $180,000 in penalties against a former Coffee Club cafe in Brisbane back in 2017.
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