A Northcote cafe owner accused of underpaying staff has threatened to sue those who complained "if the harassment continues".

Current and former staff of Barry cafe in Northcote told the ABC they had been underpaid by at least $5 an hour, and that when they complained to the cafe's owners, some workers had their shifts cancelled.

The office of the Fair Work Ombudsman has confirmed to the ABC it is now investigating those claims.

In an email sent to Anna Langford on Anzac Day, the cafe's co-owner Steve Petroulias promised to reimburse unpaid wages, but also threatened legal action against the 20-year-old.

The email said:

"Hi Anna, I just wanted to advise you that as you will see in your payslip tomorrow or Friday (because of the holiday) I have already adjusted the wage rate to the correct award rate. Any moneys owed to you will be paid in full according to the law. However if the harassment continues to hurt and devalue our business each one of you Will be sued individually and collectively. Steve"

Nine current and former staff of Barry cafe raised their concerns about underpayment earlier this month, but a request to meet as a group was rejected by Mr Petroulias, who said he would only meet with staff individually.

Last Friday, a further request to meet as a group was again rejected. That night, several staff — including Ms Langford — were advised that their shifts had been cancelled indefinitely.

Anna Langford says she was fired from the Northcote cafe after raising issues about her pay and conditions. ( Supplied: Anna Langford )

On Monday, staff protested outside the cafe, along with members of the hospitality union United Voice.

Ms Langford said she was stunned and angered when she received the email on Wednesday.

"We thought that after the protest they would finally start to work with us," she said.

"I can't think what they would be wanting to sue us for. They use the word 'harassment'.

"But I can't see how us telling the truth is harassment, when they refused to work with us for so long."

A copy of the workplace agreement for employees at Barry cafe in Northcote, Melbourne. ( Supplied: Anna Langford )

'We had to call the police' over rally outside cafe

Cafe co-owner Anne Petroulias told the ABC she feels harassed.

"They had one big rally, and we had to hire guards, and we had to call the police," she said.

"Some of the people here, the customers were scared. Two old ladies called the police themselves.

"They are planning another [protest]. This is not the way to go about it."

Former staff at Barry cafe protested with Union Voice after workers said they had been underpaid by at least $5 an hour. ( ABC News: Jessica Longbottom )

Ms Petroulias said Barry is the first cafe she and her brother Steve have owned. She says they were told weekend penalty rates could be traded off for staff meals.

"We had no idea about wage rates or anything. My brother looked on Google, and got the wage rates. I know we did wrong and we want to rectify anything," she said.

"The value of our business is really gone to zero. We paid a lot of money to come here a year and a half ago and it's all borrowed money. We are going to lose our house because of that. We don't know what to do. It's really difficult for us."

Ms Langford said she was pleased the owners had promised to reimburse unpaid wages.

"I've also been told that the breaks at work are now half an hour instead of 15 minutes. They are changing what they have to, but they are still behaving outrageously to us," she said.