'Mamak' In Australia Is Fined AUD300,000 For Deliberately Underpaying Workers

The judge has ordered the Malaysian food chain to audit its pay practices.

Cover image via Mamak Haymarket Facebook

For the last few years, Malaysian food chain 'Mamak' in Australia has been a popular go-to restaurant for authentic, delicious Malaysian cuisine at affordable prices

Image via Mamak

However, it made headlines recently for the wrong reasons, as the Australian court has fined the operators AUD292,672 (RM898,610) for shortchanging its employees

Image via Mamak Haymarket

The Federal Court has found that the workers themselves were paying the price for the cheap eats, penalising the company and three of its directors nearly AUD300,000 for deliberately short-changing employees and using false records to disguise the underpayments.

The Fair Work Ombudsman took legal action against the business, which also has outlets in Chatswood and Melbourne, in January after discovering six employees – five were visa-holders from non-English speaking backgrounds – were collectively underpaid more than AUD87,000, earning as little as AUD11 an hour between February, 2012 and April, 2015.

Judge Justin Smith found Mamak on Goulburn Street, Haymarket, conducted informal market research into pay rates on the black market and deliberately underpaid staff to maximise profit.

The following is the breakdown of the fine handed out by Judge Smith:

Restaurant owners Lee Joon Hoe, Julian Lee and Alan Wing-Keung Au have been fined AUD36,992 (RM113,534), AUD35,360 (RM108,525) and AUD35,360 (RM108,525) respectively.

Their company Mamak Pty Ltd was penalised AUD184,960 (RM567,671).

According to the Fair Work Ombudsman, the national minimum wage is currently AUD17.70/hour but the employees were paid less than AUD11/hour

"Not only did the respondents know that the employees were being paid less than their legal entitlements, but they also knew that their records were not kept in accordance with the law," Judge Smith was quoted as saying by Business Insider Australia.

He also added that he wanted the severity of the penalties to act as a deterrent for other employers.

"The point here is that all of the respondents knew that there was an Award but deliberately chose to ignore it in order to maximise profit," he said.

On top of the financial penalties, it was reported that Judge Smith has also ordered Mamak Pty Ltd to audit pay practices across all of its restaurants next year and to rectify any underpayments identified by commissioning a qualified professional.

Judge Smith further explained how restaurant operators conducted their own informal market research on pay rates on the black market

"They discovered that there were three approaches – the first were the star-rated restaurants which paid according to the Award, the second were medium restaurants that followed the Award half the time and the third included small restaurants that just paid illegal rates," he reportedly said.

The judge found that 'Mamak' took the third approach.

"The fact that there are many restaurants in the industry that do not comply with their legal obligations does not exculpate the respondents in any way. In my view, it does the opposite," he added.

'Mamak' started in Australia from humble beginnings

Image via Mamak

According to its website, founders Alan, Clement and Julian, used to set up a market stall at Sydney's Chinatown Night Markets every Friday to hone their skills in making roti canai, teh tarik and authentic satay, all of which are now Mamak's signature dishes.

Eventually, they opened their first restaurant in the heart of the Sydney central business district in 2007. Their business continued to flourish as they opened a second branch in Chatswood and the third in Melbourne on October 2010 and September 2012 respectively.

Since then, 'Mamak' has received multiple awards from the likes of TripAdvisor, The Guardian, Time Out Melbourne and more.

Do you think this will deter other employers from underpaying their staffs? Let us know your thoughts in the comments section below!

Meanwhile, hardworking Malaysians can earn up to RM12,000 per month as farm workers in Australia: