Starbucks Coffee Australia Pty Ltd (Starbucks) has back-paid staff in Sydney, Melbourne, Brisbane and the Gold Coast more than $4.5 million.
The amount includes more than $4.34 million in wages and entitlements, more than $180,000 in interest and more than $40,000 in superannuation – to 2,427 current and former employees, who were underpaid between 2014 and 2020.
Starbucks must also make a $150,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund as part of of Enforceable Undertaking with the Fair Work Ombudsman.
Most of the underpayments were the result of Starbucks failing to pay part-time staff the correct overtime pay they were entitled to under the Fast Food Industry Award 2010 and the Fast Food Industry Award 2020.
The underpaid part-time employees included baristas, supervisors and assistant managers. Many were young workers. The underpaid employees worked across 52 stores.
Starbucks failed to comply with the Award-requirement to have written agreements in place specifying the regular workdays and hours that made up each part-time employee’s ‘ordinary hours’ of work.
This led to Starbucks often failing to recognise when part-time employees were entitled to be paid overtime entitlements.
Some part-time employees were also underpaid annual leave and public holiday entitlements.
A smaller number of full-time store managers were also underpaid due to Starbucks paying them annual salaries that were insufficient to cover their minimum Award entitlements, given the significant amounts of overtime and weekend work they performed.
Individual back-payments range from $20 to $18,574.
This matter demonstrates how important it is for employers to place a high priority on their workplace obligations. For Starbucks, a failure to have written agreements in place for part-time staff and a set-and-forget approach to paying some full-time staff on annual salaries resulted in significant underpayments and rectification costs.
Starbucks must also make a $150,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund as part of of Enforceable Undertaking with the Fair Work Ombudsman.
