Subway forced to cough up workers' unpaid wages in crackdown on fast-food sector

Updated

Fast-food chain Subway has been hit with hefty fines for underpaying workers at 17 franchises across Australia.

Key points: Seventeen of the 22 Subway franchises investigated had underpaid employees

The ombudsman found 167 employees had missed out on more than $80,000 in wages

The affected workers are mainly young or come from migrant backgrounds

After a lengthy investigation into anonymous complaints, the Fair Work Ombudsman has recovered $81,638 in unpaid wages for 167 current and former employees.

A franchisee who ran two Subway outlets in Sydney was fined $65,438 after underpaying one Chinese worker more than $16,000, while inspectors issued seven compliance notices, nine formal cautions and nine on-the-spot fines for record keeping and payslip breaches.

The investigation probed Subway franchisees in New South Wales, Queensland and Victoria after anonymous employee tip-offs about potential breaches of Australian workplace laws.

Among the breaches, the ombudsman found Subway failed to pay the employees minimum wages, casual loadings, holiday and overtime rates, and did not issue proper payslips or keep proper employment records.

Fair Work Ombudsman Sandra Parker said she was very concerned at the rate of non-compliance at the Subway franchises where workers were underpaid.

"Half of the underpaid Subway employees were young workers or from a migrant background, which can make them particularly vulnerable to exploitation," Ms Parker said.

"For many of these workers, it might have been their first job and they could be unaware of their workplace rights or scared to raise issues with their boss."

"Franchisors can be held legally responsible if their franchisee stores don't follow workplace laws. The community expects head companies to assure themselves that all the stores in their franchise network are paying workers their correct wages and entitlements."

After interviewing Subway employees, managers and franchise owners, inspectors found 18 of the 22 outlets investigated had breached Australian workplace law.

Over the past two years, the Fair Work Ombudsman has recovered almost $150,000 in withheld wages and entitlements for Subway employees.

Recent worker underpayments by franchisees investigated by the Fair Work Ombudsman include Sunglass Hut, Coffee Club and Tokyo Sushi.

Franchisees face termination: Subway

Subway said it had strengthened its employment education program for franchisees and restaurant workers since 2017 to enforce higher standards.

"Like the Fair Work Ombudsman, Subway is extremely concerned with wage underpayment and does not tolerate deliberate wage theft," Subway said in a written statement.

Subway said 1,350 franchisees are not only required to comply with Australian workplace laws, but are also required to meet Subway's own standards of operation.

"Failure to do so results in enforcement action by Subway including possible termination of a franchise agreement."

Subway said it now had a rolling audit of franchisee employment records and will continue to work closely with the Fair Work Ombudsman on any concerns raised by restaurant workers about wage and employment conditions.

Follow Peter Ryan on Twitter @peter_f_ryan

Topics: business-economics-and-finance, company-news, retail, work, australia

First posted