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The FWO has secured fines against the operation for the second time in less than a year.
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Coffee bar penalised for withholding $14k in JobKeeper payments
25 May 2023
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The FWO has for the second time in under a year secured penalties in court against operators of a Melbourne juice and coffee bar after they withheld more than $14,000 in JobKeeper payments from an employee.
Rika Foods North Melbourne, which operated the juice and coffee bar inside the Sonsa Markets in Collingwood, had a $26,640 penalty imposed by the Federal Circuit and Family Court along with a $5,328 penalty against company director Radomir Pantovic.
The penalties were applied as the business failed to obey a compliance notice that required it to back pay $14,400 in JobKeeper payments plus interest to a worker who was employed on a casual basis between September 2020 and March 2021.
A Fair Work inspector issued the compliance notice to the firm in November 2021 which required the business to provide all outstanding payments to the worker within four weeks.
The company failed to obey the notice, which Judge Heather Riley said was deliberate and that the amount was a “substantial amount of money in anyone’s terms, but particularly for a casual worker in the hospitality industry.”
“Of course, the whole point of JobKeeper payments to employers was to enable them to pay their staff when business was slow or non-existent,” said Judge Riley.
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“The point of JobKeeper payments was not for employers to retain the money for their own benefit as has happened in this case.”
Judge Riley said the company and Mr Pantovic had shown no regret for their conduct and that there was a need to impose penalties to stop them from not complying again in the future.
She also ordered the matter be referred to the Commissioner of Taxation “for investigation into whether the respondents have breached any laws administered by the Commissioner in circumstances where the respondents have admitted to failing to remit JobKeeper payments”.
The action against the firm comes less than a year after it was penalised $11,988 and Mr Pantovic penalised $1,998 for withholding payment to a visa holder from South Korea who worked at the business in January 2021.
The business failed to obey a compliance notice issued to back pay the employee which saw the penalty imposed by Judge Jonathan Forbes in October 2022.
In a separate matter, a bed and breakfast operation in northern NSW incurred a $19,980 penalty after the regulator found it had underpaid a Sri Lankan visa holder.
A $16,650 penalty was imposed against Nimos Leisure, which operates Stannum House in Tenterfield, along with a further $3,330 penalty against one of the company’s directors, Mohan Lal Siribaddana.
The FWO found Nimos Leisure failed to obey a compliance notice issued to back pay the entitlements of the Sri Lankan visa holder employed there between December 2017 and January 2019.
The Fair Work inspector formed the belief the worker was underpaid for weekend, overtime and public holiday penalty rates as well as annual leave entitlements.
The business back paid the worker only after the FWO commenced legal action. Judge Nicholas Manousaridis labelled as unacceptable the failure to provide full payment until a year after the compliance notice was issued.
Fair Work Ombudsman Sandra Parker said businesses which fail to obey compliance notices should be aware that they could face penalties in court on top of having to back pay workers.
“When compliance notices are not followed, we are prepared to take legal action to ensure workers receive their lawful entitlements,” said Ms Parker.
“Employers also need to be aware that taking action to protect vulnerable workers, like visa holders, is an enduring priority for the agency.”
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