Self-audit identifies Red Rooster staff owed over $600k
A self-audit of the wages of 3,140 Red Rooster employees has found they were underpaid a total of $645,253 between 2010 and 2011.
So far 1,206 current and former employees have been back-paid $346,285, meanwhile the back-payments of $298,698 owed to 1,934 employees are currently in progress.
A total of 106 outlets were scheduled to be audited, however 23 stores were placed in liquidation during the term of the deed. Employees who were underpaid at these stores will not receive the amounts they are owed.
The Australian-based fast food chain agreed to conduct the audit, which covers the period between 1 January 2010 and 31 December 2011, as part of a Proactive Compliance Deed with the Fair Work Ombudsman, which it signed in February 2012.
Fair Work first proposed the Deed in 2009 when it identified a problem with the interpretation of the company’s Red Rooster Agreement 2009.
The Agreement was negotiated by the chicken chain with the Shop, Distributive and Allied Employees’ Association on behalf of the majority of its franchisees, and it came into effect on 16 March 2010.
Following the investigation of a series of complaints from Red Rooster franchise employees in 2011, the Fair Work Ombudsman found the pay rates outlined in the Agreement were below those of the Fast Food Industry Award 2010.
According to Fair Work Ombudsman Natalie James, the Deed has helped to ensure thousands of young and casual workers were being correctly paid.
“Many of the young people working in Red Rooster franchises would have had little, or no previous work experience, and limited knowledge of their lawful entitlements,” she said.
A number of franchisees have struggled to make back-payments within the 30 September 2012 time period as outlined in the Deed.
The Fair Work Ombudsman has subsequently agreed to repayment plans in certain cases because of the financial circumstances of some franchisees – in one instance an employer took out a bank loan in order to process the back-payments.
“We recognise that many franchises are small businesses and that trading conditions for some have been difficult, so we have worked with Red Rooster to ensure they have adequate capacity to rectify any underpayments,” said James.