Perth restaurant operator fined $42,000 for underpaying husband and wife

The former operator of a Perth restaurant has been stung with a $42,240 fine for deliberately underpaying two migrant workers almost $80,000.

Vincenzo Salvatore Todaro, who owned and managed the Venezia restaurant on Pier Street in Perth’s CBD was fined by the Western Australian Industrial Magistrates Court for underpaying a husband and wife $78,054 from March 2006 to December 2007. The court proceedings follow an investigation by the Fair Work Ombudsman.

The two employees, who come from Malaysia and China and spoke limited English, were employed in the restaurant as a cook and kitchen hand.

The employees sued VST, a company operated by Todaro, in 2010, with the court finding at the time Todaro was personally involved in regularly paying the pair less than $10 an hour, resulting in shortfalls of hundreds of dollars in pay each week.

The court ordered the outstanding entitlements be back-paid, however VST ceased trading shortly after the ruling and the wages were not repaid. Ownership of the restaurant was later transferred to a new company operated by Todaro, called VCR.

Magistrate Dianne Scaddan said Todaro has shown no contrition and has “been recalcitrant in his attitude to the court process”. Further, she said the underpayment of the two workers was deliberate and, by transferring ownership of the restaurant from VST to VCR, Todaro sought to “escape the obligations to pay the entitlements owed”.

Scaddan describe Todaro’s actions as “serious and at the upper end of the spectrum in terms of the deliberate nature of them and their ongoing detriment to people who are properly categorised as vulnerable employees”. “This was not a situation whereby an employer had made an honest mistake about their obligations,” she said.

Scaddan also said a high penalty was warranted in this case to make an impact on other business owners in the hospitality industry.

“The nature of the hospitality industry often involves vulnerable people, because they may be less skilled workers, having had less formal education and certainly the pay scales involved demonstrate that they are perhaps not as well paid as in other industries,” she said. “And for all of these reasons, that often puts people in the hospitality industry in a less bargaining position to the people who employ them.”

Employment lawyer Peter Vitale told SmartCompany it was interesting to see the Ombudsman pursue an individual company director, who had attempted to avoid his obligations to his employees by liquidating one company but continuing to operate his restaurant through what appeared to be a phoenix company.

“It illustrates that the Ombudsman is more than willing to go after the individuals behind these companies,” said Vitale.

Vitale said that the penalty ordered by the court in this case also appears to have been increased because Todaro had attempted to evade his obligations.

“It demonstrates that business owners must be aware of and meet their minimum obligations and that adopting evasion tactics through corporate structures is not an answer,” he said.

SmartCompany was unable to contact Todaro for comment.