Exclusive – Written by Workforce editor David Marin-Guzman.
The Sydney Opera House’s iconic Opera Kitchen is being monitored over what is said to be a “pattern of behaviour” after the Fair Work Ombudsman (FWO) found it had underpaid a visa worker minimum rates and wrongly substituted meals and drinks for penalty rates and loading.
The revelation comes as the company that owns the venue is seeking a broad enterprise agreement (EA) covering Opera Kitchen and other premium restaurants that would offset hundreds of workers’ penalty rates and loading with training, meal allowances and tips.
The FWO issued a media release this morning (August 5) saying it had put an unnamed high-profile restaurant on Sydney Harbour on notice over its workplace practices after repeated complaints by staff about being underpaid.
Workforce Daily can reveal the premium restaurant is SPV Operations Pty Ltd t/a Opera Kitchen owned by restaurateur David Wallace.
In the latest staff complaint against the restaurant, an Italian backpacker on a 417 working holiday visa was last year allegedly short-changed almost $6k while working as a kitchen hand.
The FWO said the employee was paid a flat rate of $16.50 an hour in the last six weeks of his employment – less than the minimum hourly rate.
Before then he was paid higher hourly rates but not enough to cover casual loadings and penalty rates, the FWO said.
The restaurant had argued it had an individual flexibility arrangement (IFA) with the kitchen hand that provided “benefits” in return for the $16.50 flat rate.
Those benefits included discounted staff uniforms, on-the-job training, meals and drinks.
FWO Natalie James said the business was “under the misguided belief” it could count such benefits as meeting its workplace obligations under the restaurant award.
When FWO issued a compliance notice to the restaurant to back-pay the kitchen hand $5,703 and a former waitress $386, the restaurant challenged the notice in the Federal Circuit Court.
The court granted a stay but after two months of vacated court dates the restaurant eventually agreed to send cheques for the wages and entitlements via its solicitors.
James said “a pattern of behaviour by the restaurant now means it has been targeted for ongoing education and compliance monitoring”.
Opera Kitchen makes no admissions
Lawyer Farshad Amirbeaggi of Yates Beaggi Lawyers, representing Opera Kitchen, told Workforce the restaurant had sought a stay of the compliance notice because it wanted to conduct its own assessment and disagreed with FWO over classifications and meal breaks.
He said the notice had given Opera Kitchen nine business days to comply after what had been an 18 months investigation by FWO.
However, Amirbeaggi said the cost of going through with the challenge was judged “uneconomical”, given the small amounts of money involved.
The Opera Kitchen made the payments with no admissions, he said.
A Sydney Opera House spokesperson told Workforce Daily it was investigating the matter with Opera Kitchen and was “committed to a fair working environment”.
The spokesperson said it contracted out all its food and beverage outlets to third party operators and it was the operator “who is responsible for all staff management and workplace practices”.
SPV offers ‘tips’ for penalty rates
SPV Operations – which is understood to own other Sydney premium restaurants such as Steel Bar & Grill – is now preparing to lodge an EA that would cover hundreds of its employees across all venues in its group.
On top of that it is about to issue IFAs to staff.
Both the EA and the IFAs would specify flexibility variations to award rates and entitlements.
While SPV would pay staff on IFAs minimum hourly rates they would offset award loading and penalty rates with other “benefits”. The EA would vary minimum award rates for other staff whose roles don’t accommodate the IFA set-off.
Under Restaurant Award 2010 clause 7, employees can agree on an IFA that would vary penalty rates, allowances, overtime and leave loading to meet their “genuine individual needs”.
However, the agreement must leave the employee better of overall than the award.
Amirbeaggi told Workforce that “up until now [SPV’s] been operating on the basis of clause 7 flexibility providing staff on varying rates”. “Where it’s been one or two hours below minimum wage and it’s been raised [by staff], they’ve met it.”
He said the new agreements would offer clarity about the company’s preferred arrangements.
The EA, which Amirbeaggi said FWO had assisted with, says that recognised industry certified training, a meal allowance of $5 every shift hour, plus tips, are benefits to staff that would set off the loss of penalty rates and loading.
Amirbeaggi claimed tips could be regarded as an extra benefit to staff since many employers in the industry kept them.
He said the industry training cost from $1,800 to $2,500 per staff member.
Opera Kitchen had removed discounted uniform, meals and drinks as benefits offered in the IFAs following FWO advice.
The FWO had pointed SPV to last year’s Federal Circuit Court ruling that fined two La Porchetta franchises $334k after they “offset” half-priced pizza and soft drink against workers’ wages and entitlements. The restaurants were also paying flat hourly rates below the minimum (WF 13/06/14).
It remains to be seen if the Fair Work Commission will find that SPV’s proposed benefits pass the BOOT.
FWO monitoring premium restaurants over visa underpayments
In its release on the harbour restaurant, the FWO said its overseas workers team was monitoring a number of other high-profile Sydney CBD restaurants following intelligence some were paying flat hourly rates to overseas workers below minimum award entitlements.
The news comes just days after the Federal Government announced it had reached a labour agreement that would grant ‘fine dining’ restaurants streamlined access to visa workers at a 10% below the income threshold – or $48,510 (WF 31/7/2015).
The agreement defines “fine dining” as “premium quality restaurant”, with attributes such as uniformed staff and industry recognition through award programs.
The Restaurant & Catering Association estimates about 4,000 businesses will be covered by the agreement.
(This story first ran in Workforce Daily, August 5, 2015)
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