A Brisbane cafe operator has been handed $95,000 in penalties to the business and a combined total of $24,800 to the owners and managing director for “paying” staff, most of whom were vunerable workers, in food and drink.

The Fair Work Ombusman, Ms Sandra Parker, outlined that such practices clearly breach the provisions of the Fair Work Act that require employees be paid in actual money.

“Purporting to pay employees in food and drink is a clear breach of workplace laws and employers can face significant penalties” explained Ms Parker.

Eight of the 11 employees were paid according to Individual Flexibility Agreements (IFAs) that provided for flat hourly rates and a list of ‘bonuses’ and ‘allowances’ – instead of being paid penalty rates and overtime under the relevant Restaurant Industry Award 2010.

The IFA ‘allowances’ included employees being allowed food and drink for the most part up to the value of $42 per day when working, including $20 in meals, $7 in desserts and $15 in drinks.

The businesses conduct also breached workplace laws by failing to ensure the IFAs passed the better-off-overall test (which requires employers to ensure employees are better off overall under an IFA than under the relevant Award) and failing to detail in the IFAs how each individual was better off overall under the IFA.

Lessons from this case

It should be absolutely clear that all time worked is time paid, and that payment must come in the form of money to the employee, not food, drink or accommodation. Arrangements where employees receive these benefits should be separate transactions that are reasonable. In a retail fuel setting this would include processing of at work in-store transactions with full paper trail, particularly if there is an agreement to deduct costs from wages. Such instances should be clearly documented along with the authority to deduct.

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HR Highlights are things to consider, implement and watch out for in your business.  They are provided as general advice and should seek further advice on your situation by emailing employment@acapma.com.au to reach one of the ACAPMA Workplace Relations Professionals, its free for members.

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Elisha Radwanowski BCom(HRM&IR)
Executive Manager Employment and Training