Restaurant Employees – Are you being served the wrong wage?

Over the past few years the restaurant industry has been shaken by the revelations of underpaid staff by high-end restaurants such as Dinner by Heston and those belonging to George Calombaris’s empire.

In 2019, George Calombaris’s MAdE Establishment back paid $7.8 million in wages and superannuation after underpaying 500 current and former employees, whilst more recently (2020) Dinner by Heston owed at least $4.5 million in underpayments following an administrator’s report.

Although auditing may shed light on the dark corners of wage theft and poor (if not deliberate) accounting and/or management methods, restaurant staff can play a pivotal role in ensuring they do not fall victim to underpayment. The key questions to consider are:

1. Does an Award apply to my employment?
2. Which Award applies to my employment?
3. What are my entitlements under the Award?

Restaurant Industry Award 2010

If you work in a restaurant, whether as a food and beverage attendant, kitchen staff (not including Chefs), administration (clerks), store person, security or a handyperson (not a tradesperson), you are likely covered by the Restaurant Industry Award 2010 (‘the Award’).

The Award sets out the minimum terms and conditions of employment in addition to those outlined under the National Employment Standards (NES).

Employers and employees may agree to vary the terms of employment set out under the Award, as long as such variations result in the employee being in a better position than under the Award. Under clause 7 of the Award, an employer and employee may vary the following terms:

1. arrangements for when work is performed (excluding clause 32); or
2. overtime rates; or
3. penalty rates; or
4. allowances; or
5. annual leave loading.

Increased Salaries and Overtime

Often employers and employees enter into (or attempt to) an arrangement where the employee’s salary is increased in full satisfaction of other entitlements such as overtime. This can be a dangerous exercise and perhaps outside the boundaries set by clause 7 of the Award, as an employee may work overtime which, over the period of a year, results in the employee accumulating wages above the salary agreed to. If an employee works overtime, such overtime will be payable should the employee’s payable hours exceed their salary. An employer cannot contract out of the minimum entitlements set out under clause 33 of the Award.

This does not mean employers should only pay staff the minimum wage, but certainly should avoid an all-encompassing salary that may fall short of an employee’s minimum entitlements.

If you are a restaurant employee who works overtime, you should consider keeping track of such overtime worked to ensure you are not being underpaid over the course of a year (or more).

Reasonable Additional Hours

A common misconception is that the NES provides that an employer may request an employee to work reasonable additional hours as part of their standard wage or salary in all circumstances. The Fair Work Ombudsman clarifies that although the NES applies to all employees covered by the national workplace relations system, reasonable additional hours must take into consideration where an employee is entitled to receive overtime payments, penalty rates or other compensation for working additional hours. Where an employer requests that an employee works reasonable overtime, overtime can only be reasonable so long as the following is considered:

1. any risk to health and safety from working the extra hours;
2. the employee’s personal situation, including their family responsibilities;
3. the workplace’s needs;
4. if the employee is entitled to receive overtime payments or penalty rates for working the extra hours;
5. if they are paid at a higher rate on the understanding that they work some overtime;
6. if the employee was given enough notice that they may have to work overtime;
7. if the employee has already stated they can’t ever work overtime; and
8. the usual patterns of work in the industry.

An employee can refuse to work overtime, if the request is unreasonable. Pursuant to clause 33 of the Award, restaurant employees are entitled to overtime and penalty rates for any additional hours requested/worked. Thus, it may be unreasonable for a restaurant employer to request an employee to work additional hours without additional pay.

Changes to the Award

Every 4 years the Fair Work Commission (‘FWC’) reviews modern awards. On 23 January 2020, the FWC provided a determination for immediate changes to the Award. There are 3 major changes outlined, being:

1. changes to clauses relating to apprentices, by effectively introducing a competency-based progression and amended the apprentice wages and allowances;
2. changes to clause 39 relating to any deductions made with respect to wilful misconduct; and
3. changes to clause 32 relating to break provisions for employees working 5 or more hours, or more than 10 hours.

These changes can be difficult to understand, and you should consider seeking expert advice before making any deductions or payments pursuant to these changes.

If you are a restaurant employee or employer and you are concerned about wages and/or entitlements under the Award, please do not hesitate to contact me.