Red Rooster employment audit reveals nearly half of its staff underpaid

Posted by AFN Staff Writers on 27th August 2014
Red Rooster employment audit reveals nearly half of its staff underpaid
Red Rooster employment audit reveals nearly half of its staff underpaid

The Fair Work Ombudsman today released a report outlining the results of its Proactive Compliance Deed with Red Rooster Foods Pty Ltd, revealing the fast food company had underpaid 3,140 of its 7,000 staff.

Red Rooster is an Australian company owned by Quick Service Restaurant Holdings Pty Ltd and has both company-owned and franchise outlets in every State and Territory (except Tasmania) employing more than 7000 people. The major fast-food chain signed the Deed in February, 2012, and agreed to self-audit the employment records of thousands of staff working for its franchise outlets.

Key results from the audit included:

  • The wages of 3,140 employees were audited in 83 franchise outlets, with $645 253 in underpayments identified
  • Four employee pay queries were actioned
  • 1,206 employees and former employees have already been back paid in full, receiving $346 285 in total
  • Processes have been implemented to improve compliance with Commonwealth workplace laws.

The Fair Work Ombudsman acknowledged that by agreeing to the Deed, Red Rooster had “committed to continuing to improve its workplace practices and places a high priority on compliance with workplace laws”.

Fair Work Ombudsman Natalie James said the Deed established a framework for her Agency and Red Rooster to work together 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,” Ms James said.

The Fair Work Ombudsman first proposed the Deed to the company after identifying a problem with the interpretation of its Red Rooster Agreement 2009.

The 2009 Agreement was negotiated by Red Rooster with the Shop, Distributive and Allied Employees Association on behalf of most, but not all, franchise outlets.

However, when it investigated a number of complaints from Red Rooster franchise employees in 2011, the Fair Work Ombudsman found the pay rates in the Agreement were below those of the Fast Food Industry Award 2010.

The Fair Work Ombudsman has agreed to repayment plans in certain cases because of the financial circumstances of some franchisees, noting that in one instance, an employer took out a bank loan in order to be able to repay outstanding wages and entitlements.

“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,” Ms James says.

Where employees could not be located, money has been paid to the Fair Work Ombudsman and is being held in trust.  During the term of the Deed, 23 franchise outlets were placed in liquidation, and therefore unpaid wages from these stores could not be recouped.