Running a restaurant can be a challenging but rewarding venture. When you employ people to work for your restaurant, it is important that you understand your legal obligations. These include those encompassed by the Fair Work Obligations. If you fail to meet these obligations, you could be liable to back-pay your employee’s entitlements. To help you understand your workplace obligations, this article explains the:
- general workplace protections under the Fair Work Act (FWA);
- Restaurant Industry Award 2020; and
- effect of certain provisions in employment agreements.
General Workplace Protections
The FWA outlines the general Fair Work Obligations which apply to you and your employees. Notably, the FWA outlines workplace rights such as your employees’:
- entitlements under a modern award or enterprise agreement;
- ability to start begin proceedings against you for breaching a workplace law, modern award or agreement; and
- capacity to make a complaint to the Fair Work Ombudsman concerning their employment.
In addition, the FWA:
- enables employees to become a member of a union to engage in industrial activity; and
- prohibits you from taking adverse action against an employee because of their race, sex, age, sexual orientation, physical or mental ability, marital status, and religion.
As a result of these general workplace protections, you cannot:
- take adverse action against your employee for a discriminatory reason, such as dismissing an employee based on their gender;
- coerce your employees, such as by threatening to fire them if they take industrial action;
- unduly influence or pressure your employees, such as forcing them to agree to a deduction of wages; and
- make a false or misleading representation, such as misrepresenting your worker’s right to take part in industrial action.
Restaurant Industry Award 2020
A modern award is a legal document that outlines the minimum pay rates and conditions of employment in a specific industry. These also inform the Fair Work Obligations. If you are running a restaurant and there is no enterprise agreement in place, you should consider the terms of the Restaurant Industry Award (the Award).
Who is Covered By the Award?
The Award covers employers and employees who work in the restaurant industry. This includes:
- restaurants;
- cafes;
- reception centres;
- catering services; and
- night clubs.
However, the Award does not generally cover:
- restaurants connected to a hotel or pub;
- take-away businesses;
- restaurants at registered clubs; and
- catering services for airlines or catering aged care employees provide.
What Are the Minimum Pay Rates Under the Award?
Your employee’s entitlements will depend on what class they fall into. The Award sets out a classification structure based on the tasks that employees perform. You can find these classes in Schedule A of the Award.
For example, the classifications range from level one which includes kitchen assistants, to level six which includes head chefs. The hourly pay rate of a full-time adult worker who is classified as a level one kitchen assistant is $20.92. This is different from the hourly pay rate of a full-time adult worker who is classified as a level six chef and is entitled to $25.83 per hour. The hourly rate will of course change if your employees are casual workers. You can find these rates in Schedule B of the Award.
What Are Some Other Entitlements?
Depending on whether you employ staff on a casual or a full-time and part-time basis, your employees can be entitled to:
- overtime payments calculated on their base rate of pay;
- take time off in lieu instead of being paid for overtime work;
- penalty rates on the weekends or public holidays;
- paid and unpaid breaks;
- leave and annual leave loading; and
- allowances for laundry, meals and special clothing reimbursements.
Given your employee’s entitlements will vary under the Award, it would be wise to clarify your obligations with an employment lawyer. This way, you can ensure you give your employees their proper entitlements.
Continue reading this article below the formSet-Off Clauses in Employment Agreements
In addition to your obligations under the Award, your employment agreement might include other entitlements for your employees. For example, some employers include a set-off clause in their employment agreements. This means that instead of paying your employees the base rate in the Award, plus any additional Award entitlements, you can pay your employees one larger sum that is inclusive of all these entitlements.
Importantly, your employment agreement should clearly state that you will offset other entitlements against the overpayment of the Award rather than assume it is otherwise covered elsewhere. Additionally, there is a possibility of underpaying your workers where your employees’ salary is lower than the Award base rate plus any extra monetary entitlements. For this reason, it would be wise to get legal advice when drafting a set-off clause.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Takeaways
To ensure you comply with your Fair Work obligations, you should:
- be aware of the general workplace protections your employees are covered by;
- familiarise yourself with the entitlements included in the Restaurant Industry Award; and
- ensure your employment agreement does not diminish any of your employees’ minimum entitlements under the Award.
If you want to learn more about your obligations when running a restaurant, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Adverse action includes a range of conduct including, but not limited to dismissing an employee, demoting or altering your employee’s position and refusing to employ a prospective employee.
The Restaurant Industry Award covers employees who fit within the classifications of the award within the restaurant industry.
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