The Fair Work Ombudsman has issued fines and penalties totalling over $100K to the operators of Hotel Frangos and a café for underpayment of more than $320K to nearly 100 staff.
The case came to light in mid-2023, when the FWO accused Louise Maree Melotte and her husband Travis Francis Melotte of owing hundreds of thousands of dollars to 97 people who worked at their venues between May 2017 and July 2019.
The couple continue to operate Hotel Frangos and Café Koukla in Daylesford, although now through their new corporate entity.
Accusations centred on underpaying 15 junior staff aged 15 to 20, as well as visa holders from Nepal, Pakistan and Armenia, working as food & bev attendants and cooks, guest services and accounts.
It’s reported the two Nepalese cooks, on Regional Sponsored Migration Scheme visas, were regularly required to work almost 50 hours per week, and on one occasion one worked 74 hours in a week. It was determined the additional work had a significant impact on their health, safety and personal circumstances.
It’s said the two cooks were underpaid amounts totalling more than $48K and nearly $33K.
FWO investigated after receiving requests for assistance, finding evidence 27 full-time employees were paid weekly salaries – regardless of the number and times of hours worked.
Louise Melotte admitted her involvement in underpaying the staff a total of over $321K during the time specified, and both defendants admitted to requiring the Nepalese cooks on salaries to work unreasonable additional hours, which is a breach of the Fair Work Act.
Loelal P/L was the Melotte’s company that employed the underpaid workers. It was put into liquidation in 2022.
At the recent hearing Judge Heather Riley determined the underpayments were deliberate and significant, and long overdue.
“Ms Melotte has had the benefit of the $321,202 for many years. It has no doubt improved her lifestyle at the expense of the affected employees,” Judge Riley said.
While Riley noted the couple’s full admissions, she observed that these were not made at the first opportunity, and generally found the pair “not particularly remorseful”.
The Judge explained a need to impose penalties that would deter the Melottes and other employers from such behaviour in the future, issuing a $95K penalty on Louise Maree and $9K penalty on her husband, Travis.
Further to the penalties, the couple were ordered to pay back-pay and superannuation to all affected workers.
“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,” declared Fair Work Ombusdman Sandra Parker.
In the seven financial years to June 2024 the FWO reports filing 146 litigations against employers involving visa holder workers – who have the same workplace rights as all other workers – securing nearly $23 million in penalties in such cases.
Fair Work Ombudsman Anna Booth posed that the conduct was alarming and noted the department treats cases involving underpayment of both visa holders and young workers “particularly seriously”.
“It is unacceptable that nearly 100 workers were deliberately underpaid,” she said.
“These penalties and back-pay order send a clear message that all employees must be paid their basic minimum lawful entitlements, and employers who deliberately pay insufficient salaries will be met with enforcement action.”
