Hungry Jack’s faces court

Posted by Josette Dunn on 7th May 2010

The Fair Work Ombudsman has launched a prosecution against Hungry Jack’s Pty Ltd for allegedly underpaying its Tasmanian employees more than $665,000.

Money for budget

Documents lodged in the Federal Magistrates Court in Melbourne allege that Hungry Jack’s underpaid 693 of its Tasmanian employees a total of $665,695 between March, 2006 and August, 2008.

The employees worked at six Hungry Jack’s owned and operated stores in Devonport, Glenorchy, Hobart, South Hobart, Launceston and Mowbray.

The Fair Work Ombudsman alleges that Hungry Jack’s paid the workers according to rates contained in an agreement it made with the Shop, Distributive & Allied Employees’ Association – but the agreement was never officially registered with relevant industrial tribunal for approval.

Court documents allege the employees should therefore have been paid according to rates contained in the relevant Tasmanian awards relating to their positions, such as the Restaurant Keepers Award and National Training Wage (Tasmanian Private Sector) Award.

It is claimed Hungry Jack’s failure to register the agreement meant that it underpaid employees’ minimum hourly rates, penalty rates for weekend, public holiday and overtime work, annual leave entitlements, minimum engagement pay and casual loadings.

Most were young workers, including more than 70 trainees, working full time, part-time and as casuals.

While the alleged underpayments average just under $1000 per employee, the Fair Work Ombudsman says more than 30 were underpaid more than $4000 each and the highest individual underpayment was $10,000.

Fair Work inspectors first discovered evidence of the alleged underpayments when they audited Hungry Jack’s in 2007 during a national campaign targeting the fast food industry.

After conducting its own assessment of the underpayments, Hungry Jack’s back-paid almost $904,000 to more than 800 current and former staff in April last year.

However, Fair Work inspectors assessed the underpayments to be less – a total of $665,695 owed to 693 employees.

Fair Work Ombudsman Executive Director Michael Campbell says the decision to prosecute the company was made because of the significant amount involved, the fact those allegedly underpaid were in the main low-paid, young workers and because of the need to reinforce the duty Hungry Jack’s has as a large corporate citizen to comply with its lawful obligations to its staff.

“We treat the underpayment of young and vulnerable workers particularly seriously,” he said.

“Furthermore, we expect large corporations to exercise their workplace responsibilities, particularly when they employ large numbers of vulnerable workers who are unlikely to know or exercise their workplace rights.”

The Fair Work Ombudsman alleges Hungry Jack’s committed at least a dozen breaches of workplace law in relation to the alleged underpayments. The maximum penalty is $33,000 per breach.

It is also alleged Hungry Jack’s committed a further breach by failing to keep employment records in accordance with workplace laws. The maximum penalty is $5500 in respect of each of these breaches.

The date for a first directions hearing is July 1.