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Diners 'unwittingly fund hospitality underclass'


Clay Lucas and Sarah Whyte

'Underpaid'... Yuka Odashima worked at a Japanese bar and restaurant for $15 an hour.

'Underpaid'... Yuka Odashima worked at a Japanese bar and restaurant for $15 an hour. Photo: Mal Fairclough

Behind the surface glamour of Melbourne's restaurant scene lies an army of casual staff being paid wages far below their legal entitlements, industry experts and regulators say.

Diners are unknowingly fuelling an underclass of employees being poorly paid at many of Melbourne's smaller restaurants, with staff being paid as little as $9 an hour.

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Many casual employees are willingly working for wages well below the minimum wage of $15.96 per hour plus penalties, with some supplementing their base wage with tips.

But the head of the national body representing restaurants said employees are not doing it tough – restaurant owners are, in part because workplace laws are too complicated.

Zana Bytheway, executive director of the Jobwatch employment law centre, said restaurants had always been one the group's highest areas of complaints.

"Young people are employed in these industries, and they just don't complain," she said.

Despite the reluctance of restaurant staff - many of whom either don't pay tax or work in breach of visa rules - to complain, Jobwatch got over 600 complaints from the industry in the past two years.

Among those to go to both Jobwatch and the national industrial watchdog, the Fair Work Ombudsman, is Japanese student Yuka Odashima.

Until recently she worked for the Japanese bar and restaurant group behind Nama Nama, Hihou and Izakaya Den.

A recent payslip for the 25-year-old shows she is being paid a flat rate of $15 per hour, plus superannuation.

Ms Odashima said the correct rate, according to the Fair Work Ombudsman, would have been about $21 an hour for much of her work.

"It's a really busy restaurant and bar and I am pretty sure they can pay proper salary to all staff but they don't," she said. "I asked the manager why they pay just $15 and he just started getting angry. He said 'You can just find another job'."

Ms Odashima conceded that she often got tips that supplemented her wage.

One of the restaurant group's owners, Simon Denton, said Ms Odashima had not been taken off the group's rosters because she had questioned her pay, but because she was not needed.

And he said his restaurant paid far better than many others. Many of his staff worked for restaurants that had paid them $10 an hour, he said.

"A lot of the people who work for us work for other places for a hell of a lot less," he said.

The Fair Work Ombudsman is now assessing the case.

Ombudsman Nicholas Wilson said his office received a large number of complaints from the restaurant and hospitality industry, which he said had a large number of vulnerable workers.

Andrew Edwards, an investigator with the ombudsman, said it was common to find overseas students in particular working for cash once they reached the 20-hour-per-week limit specified by their visa.

Mr Edwards said he saw rates of between $8 and $10 for hospitality workers. Many overseas students questioned over their pay for this story said pay between $9 and $11 was standard for much cash-in-hand work at bottom-end restaurants.

But the head of the national body representing restaurants said the real group in the industry doing it tough was owners. "The underclass is the restaurant operators," said Restaurant and Catering Australia chief executive John Hart, who argued many worked more than 50 hours a week for little more than $40,000.

"They are being paid less than the minimum wage."

He estimated that half the restaurant industry was not compliant with regulations. "If they stay in the system they are going to go broke," he said, demanding a simplification of restaurant awards and regulations.

The association has led a push to slash penalty rates for restaurant staff, particularly on Sunday and public holidays when waiters can earn more than $40 an hour.

Tony Eldred, a consultant who trains restaurant owners and staff across Australia, said the dining boom had caused a situation where many staff worked in poor conditions.

"We have encouraged this foodie culture and driven it way beyond what the available customer base can support. The industry needs to sustain a 30 per cent price rise in order to allow proper working conditions and rates of pay — but when you have got such fierce competition, that's not possible," he said.


  • This is a major issue in Melbourne and one that is not spoken about enough. I personally know of people (mostly international students who are too scared to speak up) who work for small businesses in the the inner north who are paid $10 or under an hour, with no superannuation. In one instance, when one of the workers contacted Fari Work Australia and challenged her pay rate, she was fired.

    Date and time
    January 18, 2013, 7:54AM
    • Not just Melbourne, probably worse in regional Vic.
      This is a widespread practice.try asking workers in the local fish & chip shop?
      Anyone thinks these workers are being paid correctly is fooling themselves.

      Date and time
      January 18, 2013, 8:10AM
    • If you dont like what you are getting, leave.

      A few years ago i came to this country, and i love it to bits.

      You should appreciate the fact that you can get a job, and earn anything. If you are going to complain, do the right thing and leave our already overcrowded country.

      Oh, me and all my Muslim mates will be celebrating Australia day with the aussie flag, a BBQ and lots of fun. If you arnt doing the same, i would suggest you think about leaving as well.

      Recent Immigrant
      Date and time
      January 18, 2013, 8:15AM
    • These places need to be shut down immediately, and society needs to dob them in, inner cbd and box hill is littered with tax dodging, cash business, filled with workers without work visas. The legitimate businesses in Melbourne cannot compete against these businesses. Nothing will be done though im sure by our government/s as it will be considered offensive to a certain race and everyone is just too scared. I wonder if the Age will print this one ?

      Date and time
      January 18, 2013, 8:26AM
    • @ P - i share the same view as you. I know a few as well mainly international students that are working way under the pay level. From what I know, not all of them are scared to speak up. They would rather work longer hours more than 20 hours a week which is illegal. More like a win win situation for both the employer and employee. The one that is losing is the people that relies on this sort of Job and that sector is saturated as you are not required a permanent residency to be eligible for that role. Competition is so high that students are willing to work at $9 per hour. That is why you see most of them on centerlink benefits.

      Date and time
      January 18, 2013, 8:29AM
    • It's unfair that they're paid below the legal minimum wage, but why do they stay in the job? There are plenty of casual jobs available to young people that pay far better.
      Poor English is no excuse, hospitably is a social job and there's plenty of other jobs that require far less fluency.
      Needing the money today is also no excuse. Stay in the job today, look for something better and leave tomorrow when you find it.
      Myself and plenty of friends put ourselves through university on far higher than the minimum wage, some of us even worked in hospitality.
      I imagine that they stay because they actually do fairly well out of the tips, or perhaps they've got restrictions on a student visa on how much they can work so it's off the books.

      Date and time
      January 18, 2013, 8:44AM
    • @P - boo hoo - blame Gillard for changing the work rules to pay back the Unions for election support - so many places don't even operate on Sundays anymore - thus denying the students any income at all - please can we have the election now ! (The rate of $10 per hour still beats Gilard's Newstart)

      Date and time
      January 18, 2013, 8:56AM
    • @ Recent Immigrant, ".......leave our all ready overcrowded country." HaHaHa. Champagne Comedy that is.....

      Date and time
      January 18, 2013, 9:01AM
    • Hey Recent Immigrant, all well and good for you to say that, but what's the bottom limit? If it's okay to pay them $10 an hour, why not $5 or $2? Simple fact is that they're breaking the law by underpaying staff. For many students, getting another job presents the same problem. The girl who was fired for questioning her pay (read that again, fired) got a job somewhere else as she had to meet her rent expenses etc and the same story again. Easy to sit there, telling people to suck it up when you're not in the situation

      Date and time
      January 18, 2013, 9:03AM
    • The other trick they use is the one-week "Training" when an employee starts. The person doesn't get paid, and the employer essentially gets a free week of work.

      Date and time
      January 18, 2013, 9:09AM

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