The franchisee of an Eagle Boys pizza outlet in Cessnock in regional NSW has been fined $30,000 for underpaying young, vulnerable staff.

Stacborn Pty Ltd, owned by husband and wife Peter and Margaret Stacey, paid some staff a flat hourly rate almost 50 per cent below the minimum legal wage. The company has been ordered to back-pay more than $38,000 still owing to 13 employees.

The Federal Magistrates Court in Sydney imposed the penalties following an investigation and prosecution by the Fair Work Ombudsman.

The underpaid workers, most of them pizza delivery drivers, are owed as much as $11,478.

Stacborn must remedy all outstanding entitlements to its employees by December 31 this year. But the financially struggling company that is up for sale has 12 months to pay the $30,000 penalty.

Two shop assistants and 17 delivery drivers were underpaid a total of $48,905 between October, 2008 and June, 2010 when it paid the staff – 12 of them juniors and four from a non-English speaking background – a flat hourly rate below the minimum wage.

It has since back-paid about $10,500.

In a 26-page decision, Federal Magistrate Shenagh Barnes says the underpayments are “significant”, but accepts the contraventions are the result of ignorance on the part of the Staceys, whom she said had never previously operated a retail outlet and “completely lacked business experience”.

“Indeed, Mr Stacey had for some nine years worked as a casual pizza delivery driver for the previous owner of the business. Thereafter he paid the delivery drivers the same hourly rate that he had been paid,” FM Barnes said.

However, “the penalties should be set at an amount that make it clear that failing to comply with minimum obligations will not be tolerated by the courts,” she said.

Image: mediarbi.com.au