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Mamak restaurant operators fined $300,000 after years of underpayment and exploitation

MASSIVE penalties have been issued to operators of Malaysian restaurant brand, Mamak, after an investigation found deliberate underpayment and falsified records led to former staff being paid $11 an hour. Hieu Chau has more. 

Operators of popular Malaysian restaurant brand Mamak, have been penalised a total of almost $300,000 following a Fair Work Ombudsman investigation which uncovered its operators had deliberately short-changed former employees over several years.

Restaurant owner-operators Joon Hoe Lee, Julian Lee and Alan Wing-Keung Au were penalised $36,992, $35,360 and $35,360 respectively. Their company Mamak Pty Ltd was penalised a further $184,960.

The penalties were handed down by Federal Circuit Judge Justin Smith, who found that “all of the respondents knew that there was an Award but deliberately chose to ignore it in order to maximise profit”.

“That approach, of course, was taken at the cost of the employees, who in reality, funded the success of the business,” Judge Smith added.

Legal action was conducted by the Fair Work Ombudsman following an investigation which revealed that six of its employees at the Haymarket-based Mamak restaurant, including four former international students, were collectively underpaid more than $87,000. These employees received as little as $11 an hour between February, 2012 and April, 2015.

Furthermore, the Fair Work Ombudsman found Mamak operators used falsified records to disguise underpayments and relied on informal market research to see what other restaurants were paying their staff.

“The fact that there are many restaurants in the industry that do not comply with their legal obligations does not exculpate the respondents in any way,” Judge Smith said who also declared that Mamak’s penalties should deter other employers from similar conduct.

Although Mamak’s former employees were already repaid, Fair Work Ombudsman Natalie James also made it clear that “[cases] such as this demonstrate the harm that can be caused when businesses fail to keep records, or provide false records to disguise their deliberate underpayment of staff”.

“While I understand there are cultural challenges and vastly different laws in other parts of the world, it is incumbent on all businesses operating in Australia to understand and apply Australian laws,” Ms James added.

In addition to the issued penalties, Judge Smith also ordered Mamak Pty Ltd to commission a qualified professional to audit pay practices across all of its restaurants next year and to rectify any underpayments identified.

The audit – for the period from March to December 2016 – will cover Sydney-based Mamak restaurants (Haymarket, Chatswood) and the one in Melbourne’s CBD. A factory where Mamak’s food is prepared in Marrickville, Sydney will also be audited.

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