Melbourne’s Meatball and Wine Bar in court for allegedly underpaying young and foreign employees

The restaurateur behind the popular Meatball & Wine Bar restaurants, Matteo Bruno (Bruno), will face the Federal Circuit Court after employees were allegedly underpaid by over $14,000.

The Fair Work Ombudsman (FWO) has commenced proceedings against The Meatball & Wine Bar Pty Ltd and Bruno (the sole director) for allegedly underpaying 26 wait staff and kitchen hands at the Melbourne CBD, Collingwood and Richmond restaurants from July to October last year.

All but four of the affected employees were aged in their 20s and included 10 visa-holders (on either student or working holiday visas).  They were allegedly paid flat rates of between $17.31 and $21.69 per hour.

The alleged underpayments concern various entitlements – including minimum wage rates, overtime rates, casual loadings and penalty rates for weekend and late night work – pursuant to the Restaurant Industry Award 2010 (Award).

The highest alleged individual underpayment during the three month period was $1,419.16 for a wait staff member who allegedly received a flat rate of $17.95 per hour, falling well short of the applicable hourly rate of $18.91 and overtime rates of $28.37 under the Award.

FWO Inspectors discovered the alleged underpayments after an initial audit of the Richmond restaurant as part of a ‘proactive compliance campaign’.  After discovering the alleged underpayments, the FWO investigated the other Meatball and Wine Bar sites.

Whilst the alleged underpayments have been rectified, the FWO decided to commence litigation based on Bruno’s alleged ‘deliberate disregard’ for employees’ entitlements, especially with respect to vulnerable young and migrant workers.  The FWO has alleged that Bruno had received advice concerning the wage obligations owed to the employees.

Bruno faces maximum penalties of up to $10,800 per contravention, while The Meatball and Wine Bar Pty Ltd faces up to $54,000 per contravention.

The FWO has reported that 76% of the legal proceedings it undertook in the 2015-2016 Financial Year involved visa holders, for whom the FWO recovered just over $3 million in entitlements.

A Directions Hearing of the matter has been scheduled at the Federal Circuit Court on 19 September.

The case serves as an important reminder that employers should audit their payroll processes and the Award entitlements of employees.  It also demonstrates the potential brand and reputational damage caused when charges are brought concerning alleged underpayments.

We recommend employers engage us (or conduct these audits themselves) at least annually and keep records as evidence of the audit.  Ideally, the audit should be performed after any minimum pay increases under the relevant Award have been announced.

This article was written by George Haros, Principal Lawyer – Employment, Safety and Migration.