Australia Markets closed

Wage theft: Subway workers underpaid $82k

Subway has been scrutinised by the Fair Work Ombudsman. Image: Getty
Subway has been scrutinised by the Fair Work Ombudsman. Image: Getty

The Fair Work Ombudsman has recovered nearly $82,000 in unpaid wages for workers at 18 Subway franchises in New South Wales, Victoria and Queensland.

The 167 current and former employees were short-changed the minimum wage, casual loading, holiday and overtime rates and the employers did not give proper pay-slips.

The $81,638.82 brings the amount the Fair Work Ombudsman (FWO) has recovered from the fast food giant to nearly $150,000 over the last two financial years.

In this latest sting, one franchises was required to pay $31,383.45 to 29 employees.

“The FWO is very concerned by the rates of non-compliance we have seen in the Subway franchise network and has a number of ongoing lines of enquiry into their operations,” Fair Work Ombudsman (FWO) Sandra Parker said.

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

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

The FWO scrutinised 22 franchises, finding that 18 were not compliant with workplace laws after interviews with employees, managers and franchise owners, and analysis of records and payslips.

Franchisees have been issued seven compliance notices requiring employers fix the breaches in the laws, while nine received on-the-spot fines and another nine received formal cautions.

It comes after a Sydney Subway manager was hit with a $65,438 fine in March for underpaying one employee $16,345.

That worker had been paid $14-$14.50 an hour, well below the $18 minimum rate.

The Chinese national worker was also underpaid casual loadings and penalty rates.

“Franchisors, especially in the fast food sector, are a priority for the Fair Work Ombudsman. Franchisors can be held legally responsible if their franchisee stores don’t follow workplace laws. They must take reasonable steps to prevent this occurring.

“The community expects head companies to assure themselves that all the stores in their franchise network are paying workers their correct wages and entitlements,” Parker said.

“We encourage any Subway workers with concerns about their pay to contact us.”

In August, Subway told Business Insider that it makes “no apology” for pushing franchisees to pay for mandatory renovation costs.

"Subway makes no apology for innovating to increase the profitability of franchise owners and adapting to the changing needs of Australians," the spokesperson said.

"Subway’s menu changes, enhancements and initiatives are contributing to strong sales growth, increased franchise owner profits and allowing the brand to remain competitive in a market with more consumer choice than ever before."

Subway faces an increasingly difficult climate, amid claims of bullying and intimidation uncovered by the Sydney Morning Herald.

Subway has closed 91 stores across Australia in the last four years.

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.