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Record-keeping breaches and underpayment lands franchise $65k penalty

A Subway franchise has been penalised $65,438 for breaching record-keeping and payslip requirements, leading to underpayments to a worker of more than $16,000.

Bookkeeper Reporter 06 March 2019
— 1 minute read

The Fair Work Ombudsman has secured the penalties in the Federal Circuit Court against former franchisee Danmin Zhang, who previously operated Subway franchise outlets at Artarmon and Stanmore, and the company operated by Ms Zhang and her husband, G & Z United Pty Ltd.


Ms Zhang has been penalised $9,255, while the company has been penalised a further $56,183.

Fair Work Inspectors found the worker, a Chinese national, had been underpaid a total of $16,345 for work performed across both stores, after she was paid unlawful flat rates of $14 to $14.50 per hour.

The affected worker, a casual food and beverage attendant aged in her late 20s, was underpaid between October 2014 and April 2016, and back-paid in full in 2017.

The Court found a special clothing allowance was also underpaid and laws relating to record-keeping, pay slips and requirements to inform employees about their terms of engagement and classification were also breached.

Fair Work Ombudsman Sandra Parker said the regulator investigated after the worker lodged a request for assistance.

“It is unlawful for employers to pay their employees low, flat rates that undercut minimum Award wage rates. This franchisee paid their worker a flat rate that was $4 below the lawful rate, and now faces paying a $65,000 penalty from the court,” Ms Parker said. 

“The penalty should send a message to fast food businesses that compliance in the workplace is not an option – it’s the law. Every worker in Australia has the same workplace rights and we encourage anyone with concerns to contact the Fair Work Ombudsman.”

Ms Zhang and G & Z United Pty Ltd no longer operate the Subway outlets at Artarmon and Stanmore.

Record-keeping breaches and underpayment lands franchise $65k penalty
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