The fines are only adding up for this café operator

A Marrickville-based café is the latest business to face significant penalties after underpaying two employees and failing to comply with a Compliance Notice issued by the Fair Work Ombudsman (FWO).

In 2022, two workers requested the FWO’s assistance concerning their employment at Flow Café, and after a thorough investigation, the business was issued a Compliance Notice ordering the back-payment of workers after failing to pay wages owed under the Restaurant Industry Award 2020 correctly, and annual leave entitlements owed under the National Employment Standards (NES).

Here our experts break down the details of this case, explain what a Compliance Notice is, and why this case is a warning for all businesses.

Failing to comply only leads to more consequences

The FWO has secured in excess of $40,000  in total penalties and back-pay orders in court against the former operators of a Sydney-based café in response to their failure to comply with a Compliance Notice containing back-pay orders.

The Federal Circuit and Family Court has fined MT Infinity Pty Ltd, which operated Flow Café in Marrickville, $25,000, and the company’s sole director, Miah Golam Tareque, $5,000. These significant financial penalties are a direct result of the company’s failure to comply with a Compliance Notice that required calculating and back-paying wages to two workers who were full-time employees at the Inner-West business between April 2019 and October 2021.

In addition to finding Mr Tareque was involved in the contravention, the Court has also made an order to back-pay the two affected employees a total of $14,148.

What is a Compliance Notice?

A Compliance Notice is a tool that Fair Work Inspectors use to notify a business that they’re in breach of Australian workplace law and they’re required to fix it immediately. These are usually only used when an employer doesn’t cooperate with a Fair Work Inspector to fix the identified breach or breaches prior to commencing legal proceedings.

Compliance Notices must include information about:

• Details of how the employer or business has breached a workplace law;
• What the employer or business must do to fix the breach;
• The timeframe the business has to fix the issue;
• Applying to have the notice reviewed by a court; and
• The consequences of failing to comply with the notice.

The spotlight is on the food service sector

It’s no secret that the FWO has focused its attention and resources on improving compliance in the fast food, restaurant, and café sector, and every business – no matter the industry – needs to be aware that failing to comply with Compliance Notices will result in facing substantial court-imposed penalties on top of back-pay orders.

There’s no reason to be scared – if you do everything right!

This case serves as a critical reminder for businesses that the regulator takes underpayments very seriously and that from 1 January 2025, such actions may carry criminal penalties under the Federal wage theft offence.

How can Citation HR help?

We know that the majority of business owners facing underpayment matters are unintentionally making these mistakes – often, they’re small oversights that develop into larger problems, causing significant financial and reputational damage. In the eyes of the FWO, there’s no excuse for breaching workplace rules. If you’re unsure about your employer obligations, or you simply don’t have the time or resources to manage your people, it’s time to take action. Don’t wait until you’re in hot water with the FWO – engage with a reputable and experienced HR provider like Citation HR to ensure your business is staying ahead of compliance  

For clients of Citation HR, if any of the information in this article has raised questions or concerns about workplace compliance or you have another workplace matter you need assistance with, please reach out to our experts via the 24/7 HR Advice Line.