The Federal Court of Australia has found restaurant chain Din Tai Fung's guilty of wage theft imposing fines of $4 million. The case was bought before the courts by the Fair Work Ombudsman (FWO) which secured the second highest penalties in its history.
The Federal Court found that the fast food chain had "deliberately" underpaid staff of $157,025, with $50,588 owing to just one staff member. The court held that Din Tai Fung's efforts to deprive their workers of their hard earned money had been covered up by falsification of employee related documentation.
The fines were distributed to numerous related parties, however the most notable individual was the former HR coordinator who worked for an external company DTF World Square and was personally charged with $105,084 penalties.
The court found that the HR manager did not simply act as a conduit, rather their efforts were deliberate and unscrupulous. This had been supported be evidence produced by a former payroll officer who stated on numerous occasions they were asked to make "both accurate and inaccurate records" regarding the hours employees worked and their wages. There was further evidence that proved to the courts that temporary 457 visas employees were instructed by the HR manager to work 55 hours or they would have their hours deducted from their annual leave.
This punishment holds particular significance due to the new legislation Closing the Loopholes Act that will be effective in relation to this issue as of 1 January 2025 and makes wage theft a criminal offence at a Commonwealth level. The criminal penalties imposed on individual and companies differ and accordingly, individuals could face a maximum of 10 years in prison and/or fines upwards of $1.5 million dollars whereas companies could face fines upwards of $7.8 million dollarsThe new amendments will incorporate a criminal standard of proof where by individuals who are accused of wage theft will need to be found to have done so beyond reasonable doubt. Further any payment that relates to employees entitlements within their modern Awards, enterprise agreements or what is stipulated in the Fair Work Act will be subject to scrutiny regarding wage theft.
HR managers are encouraged to stay well informed and up to date with the various Awards that relate to their respective employees. Further HR managers should address all issues regarding accidental underpayments promptly by taking the corrective steps which can be discussed with our employment team. Lastly HR managers collectively with their team should work towards implementing preventative measures to ensure underpayments are not occurring before 1 January 2025.
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