Legal action against hotel operator who allegedly underpaid Nepali and Pakistani origin staff

The workers included food and beverage attendants and cooks, as well as two guest services staff and one clerical worker.

The Fair Work Ombudsman has commenced legal action against the operators of a regional Victorian hotel and café after staff were allegedly underpaid a total of $320,929.

Facing court are Louise Maree Melotte and Travis Francis Melotte, a married couple who have been involved in operating Hotel Frangos and Café Koukla on Vincent Street in Daylesford.

The regulator alleges that Ms Melotte was involved in underpaying 97 staff at Hotel Frangos and Café Koukla between May 2017 and July 2019.

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The allegedly underpaid workers included 15 juniors, aged between 15 and 20 at the time, and a number of visa holders, from countries including Nepal, Pakistan and Armenia.

The workers included food and beverage attendants and cooks, as well as two guest services staff and one clerical worker.

Most of the alleged underpayments relate to 27 full-time employees who were paid salaries that were not sufficient to cover their minimum entitlements under the Hospitality Industry (General) Award 2010.

It is alleged the other underpaid staff were casuals who were underpaid entitlements including minimum wage, casual loading, overtime rates, penalty rates, no meal break penalties and minimum engagement pay.

The Fair Work Ombudsman alleges Ms and Mr Melotte were both involved in requiring two Nepalese cooks on salaries to work unreasonable additional hours in breach of the Fair Work Act. The two cooks were on Regional Sponsored Migration Scheme visas.

It is alleged that the two cooks were required to work an average of almost 50 hours per week and were not provided with adequate notice of the need to work additional hours and worked additional hours to the detriment of their own health, safety and personal circumstances.

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The alleged individual underpayments for the two cooks are $47,339 and $32,710.

Fair Work Ombudsman Sandra Parker said that employers risk facing legal action if they fail to provide employees’ basic minimum lawful entitlements.

“Underpayments resulting from insufficient salaries for employees covered by Awards has become a persistent issue. Businesses paying salaries cannot take a ‘set-and-forget’ approach – they must ensure wages being paid cover all minimum entitlements for the hours their employees actually work,” Ms Parker said.

“Employers also need to be aware that taking action to protect vulnerable workers, like visa holders and young workers, continues to be a priority for the agency.”

The FWO is seeking penalties. Ms Melotte faces penalties of up to $12,600 per breach for multiple alleged underpayment breaches.

In addition, Ms and Mr Melotte each face a penalties of up to $12,600 per breach for the alleged unreasonable additional hours breaches.

The Fair Work Ombudsman is also seeking a court order requiring Ms Melotte to back-pay the allegedly underpaid staff in full, plus superannuation and interest.

All alleged underpayments remain outstanding, with the highest individual underpayment allegedly $47,339.

The company that directly employed the allegedly underpaid workers, Loelal Pty Ltd, has been placed into liquidation. Ms Melotte was the sole director of Loelal Pty Ltd until May 2020, when Mr Melotte became the sole director of the company.

A directions hearing is listed in the Federal Circuit and Family Court in Melbourne on 1 June 2023.