The franchisee of two La Porchetta restaurants in the Melbourne suburbs of Pakenham and Berwick has been caught out for allegedly underpaying 111 employees more than $250,000. 

The Fair Work Ombudsman has launched legal action against Ruby Chand and his companies Zillion Zenith International, which operates the Pakenham venue, as well as Bound for Glory Enterprises, which operates the Berwick franchise.

Fair Work alleges Chand underpaid 59 employees a total of $130,195 at his Pakenham restaurant, meanwhile 52 employees at the Berwick venue were underpaid a total of $127,824 between July 2009 and February 2012.

Chand said he did not realise he had been underpaying his staff, and claims he checked with the ombudsman four years ago to see whether it was legal to provide staff with “in kind” payments including pizza and soft drink, reports The Age. 

“We thought that we could give them free food and drink to compensate everything. Instead of someone getting paid $10.80, we were paying $10.50,” he said. 

According to a media release on the Fair Work Website, underpayments varied according to each employee and it is alleged some were underpaid as little as $3 meanwhile others were underpaid up to $25,358.

It is believed most of the underpaid employees were teenagers employed as cooks, kitchen attendants and in food and beverage on a part time or casual basis.

In fact, inspectors came across the underpayments after a parent of one of Chand’s employees lodged a complaint with the ombudsman.

On the contrary, Chand believes a Fair Work inspector was out to get him. He said “she went knocking on peoples’ doors and told them they were supposed to get paid $18 or $19 [an hour], not even realising this [was incorrect]. 

“She used to go to their houses and say ‘your son or daughter is getting paid wrong’,” he said. “I had to tell her [this was wrong],” reports The Age.

It is believed employees were paid flat hourly rates below the minimum they were entitled to, and apprentices and trainees were not paid for the minimum number of hours they were employed to work.

Acting Fair Work Ombudsman, Michael Campbell said legal action was taken due to the amount the underpayments equated to and the fact that the majority of the employees were young.

Chand faces penalties of up to $6,600 per breach and his two companies face penalties of up to $33,000 per breach.

Fair Work is also seeking court orders that will see each employee receive a back-payment for the amount they were underpaid.

The case will be heard in the Melbourne Federal Circuit Court on 18 September.