Last week, the Fair Work Ombudsman announced legal action against Louise and Travis Melotte, the operators of Koukla Cafe and Hotel Frangos in Vincent Street.
The FWO alleges that the Melottes were involved in underpaying 97 staff at Hotel Frangos and Café Koukla by over $300,000 between May 2017 and July 2019. The Melottes have been operating Frangos and Koukla since 2015.
The Melottes are addressing the FWO allegations and believed at the time that their employees were receiving their full entitlements. “We have at all times maintained processes and systems of work that we believed ensured employee entitlements were being met, including through the engagement of qualified third-party consultants,” said Ms Melotte in a statement.
Most of the alleged underpayments relate to 27 full-time employees who were paid salaries that were not sufficient to cover their minimum entitlements under the Hospitality Industry (General) Award 2010. The workers included food and beverage attendants and cooks, as well as two guest services staff and one clerical worker.
It is alleged the other underpaid staff were casuals who were underpaid entitlements including minimum wage, casual loading, overtime rates, penalty rates, no meal break penalties and minimum engagement pay.
The Melottes have been working with the FWO for a few years to resolve the dispute and were taken aback by the announcement. “We received final revised calculations from FWO of alleged underpayments (which varied from the original calculations) on 20 April 2023, to which we responded with a proposed resolution as soon as we received it. Up to and since this point, we have cooperated and continue to cooperate with the FWO throughout its inquiries,” said Ms Melotte.
“The way in which the FWO publicised this matter on Friday 28 April, the tone and content of what they included in their press release, as well as commencing proceedings despite our most recent correspondence with them, has caused us great distress and we have been dismayed at the resulting public reaction including through social media,” she said. “We are a small local business and have always taken pride in being connected with the local community.”
Fair Work Ombudsman Sandra Parker said that employers risk facing legal action if they fail to provide employees’ basic minimum lawful entitlements.
“Underpayments resulting from insufficient salaries for employees covered by Awards has become a persistent issue. Businesses paying salaries cannot take a ‘set-and-forget’ approach – they must ensure wages being paid cover all minimum entitlements for the hours their employees actually work,” Ms Parker said.
“Employers also need to be aware that taking action to protect vulnerable workers, like visa holders and young workers, continues to be a priority for the agency.”
A directions hearing is listed in the Federal Circuit and Family Court in Melbourne on 1 June 2023.
“We look forward to addressing this matter further with the Fair Work Ombudsman in due course and will, as part of that process, address the matter in court in the most appropriate manner,” said Ms Melotte.
