Malaysian restaurant signs pact with watchdog after underpaying workers $4000

A Malaysian restaurant in Perth has avoided legal proceedings after paying international students and a backpacker on a 417 working holiday visa as little as $15 an hour.

Malaysian Dining Delights short-changed five employees more than $4000 between July 2014 and January this year, according to the Fair Work Ombudsman.

The employees were underpaid their minimum hourly rate, as well as overtime, weekend, evening and public holiday allowances.

The business has paid an $850 on-the-spot fine and agreed to reimburse the employees.

The employee with the 417 holiday visa, however, cannot be located and her outstanding wages have been put in a trust until she can be contacted.

The owner of Malaysian Dining Delights told SmartCompany he was not aware he was underpaying his staff and is thankful that the Fair Work Ombudsman has agreed to assist him with complying with workplace laws.

“They were very friendly and taught me how to pay correct wages,” the owner says.

Fair Work Ombudsman Natalie James said Malaysian Dining Delights had no previous issues with non-compliance and therefore an enforceable undertaking (EU) was appropriate.

As part of the undertaking, the business owner has agreed to have employees’ future payslips and records assessed independently.

James said the undertaking will help create a behavioural change in the business and reduce the likelihood of it reoffending.

“Many of the initiatives included in EUs help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again,” James said.

Rachel Drew, partner at TressCox Lawyers, told SmartCompany enforceable undertakings can be accepted by the Fair Work Ombudsman as an alternative to commencing a claim when there is a suspected breach of the Fair Work Act.

“The Fair Work Ombudsman will generally only consider accepting an enforceable undertaking in place of court action if the employer has provided full co-operation,” Drew says.

“Typically, they won’t accept the enforceable undertaking unless the business has admitted the contravention. The ombudsman also tends to require that there be no deliberate conduct and the business owner has to convince the ombudsman that it won’t be repeated.”

Drew says there are a number of advantages for employers who enter into enforceable undertakings instead of going through the courts.

“First of all, accepting an enforceable undertaking means they avoid all of the costs, delay and uncertainty of a court process,” she says.

“It also means they can avoid being ordered to pay a fine. If the Fair Work Ombudsman commences an action for some breach of the Fair Work Act, typically the result is the business is ordered to repay the underpayments and a fine in addition.”

“With the enforceable undertaking what the business is required to do is generally some expenditure… in this case his records were checked. But that expense is within their control. It is over a short period of time and it’s not in the nature of a fine, so it tends to be a bit more palatable for businesses.”