Former Subway franchisee cops $65,000 penalty

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Inside Franchise Business: Former Subway franchisee cops $65,000 penaltyA former Subway franchisee in Sydney has copped a hefty fine this week, following an investigation by the Fair Work Ombudsman.

The Federal Circuit Court issued Danmin Zhang, the former operator of two Subway outlets in Atarmon and Stanmore with a $9255 penalty, with the company Ms Zhang she shares with her husband penalised a further $56,183.

The penalties come after Fair Work Inspectors found Zhang had underpaid a Chinese worker more than $16,000 for work performed across both stores, after she was paid unlawful flat rates of $14 to $14.50 per hour.

Under the Fast Food Industry Award 2010, the worker was eligible to receive minimum rates of more than $18, plus casual loading for ordinary hours and penalty rates of up to $52.22 on public holidays.

Sandra Parker, Fair Work Ombudsman said the investigation further demonstrated how systematic the exploitation of migrant workers in the fast-food industry is becoming.

“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,” 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.”

In October last year, a Crust Pizza franchisee in Hobart faced similar penalties for paying four migrant workers far less than their Australian colleagues.

In both instances, the underpaid employees were in Australia on working visas, with Judge Julia Baird on Monday confirming the franchisee’s failure to comply with minimum standards played a significant role in the harsh penalty hand-out.

Ms Zhang and G & Z United Pty Ltd, the business she owns with her husband no longer operate the two Subway outlets, with the FWO confirming no allegations have been made against the current operators.

Nick Hall

Nick is business journalist at Octomedia, working on View More...
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