Rockpool Dining Group is the latest high profile restaurant company forced to hand over millions to underpaid staff

SuppliedNeil Perry and Rockpool Dining Group CEO Thomas Pash
  • In July, allegations emerged at the $300 million restaurant empire that staff were working up to 30 hours a week of unpaid overtime.
  • Rockpool Dining Group engaged PwC to improve its systems and an analysis of the $100 million FY18 wages bill will see “top up” payments made to an undisclosed number of staff.
  • The group said it was upgrading “legacy systems” and is “committed to lifting industry standards”.
  • An FWO investigation into the alleged underpayments continues.

Rockpool Dining Group the restaurant empire formed after Neil Perry sold his empire to a private equity company, will pay an extra $1.6 million to staff underpaid during the 2017-18 financial year following revelations that many of the business’ 2,400 employees were working excessive unpaid overtime.

The announcement comes after Fairfax Media revealed back in July that staff at Sake and Munich Brauhaus restaurants in the group are working up to 20 hours of unpaid overtime a week, leaving them hundreds of dollars out of pocket. Leaked documents revealed that permanent chefs “regularly earn less than $20 an hour and, some weeks, up to $800 per week less than they would under the award” and that chefs regularly work 10 to 20 hours of unpaid overtime, with some working up to 70 hours per week.

While Rockpool Dining Group (RDG) CEO Thomas Pash denied the allegations at the time, calling them “spurious, inaccurate and give an incomplete picture of our practices,” it sparked an ongoing investigation by the Fair Work Ombudsman (FWO) and yesterday the company said a reconciliation review of annualised salaries for eligible employees during the 2018 financial year was done in conjunction with PwC, and said it concluded “top up payments” of approximately $1.6 million were required.

The company did not disclose how many employees were involved.

“We are now notifying eligible employees of their personal outcomes, and will begin processing payments immediately. We will separately be reaching out to former employees in the coming days,” the company said in a statement.

RDG is attempting to build Australia’s first $1 billion hospitality business by 2021, with plans to float on the ASX. Leading chef Neil Perry is the company’s Chief Brand & Culinary Officer. Perry’s former venues do not appear to be part of the issue.

Perry sold his Rockpool businesses to the former Urban Purveyor Group, best known for its Sake Japanese restaurants and The Bavarian beer houses for a reported $65 million, in 2016. The RDG business is owned by Quadrant Private Equity.

As FY18 wound up, RDG said it was on track to post sales of up to $350 million for the financial year, resulting in a profit of up to $40 million.

The business claimed it was growing at 20-30% a year and on track to have $1 billion in turnover by FY21.

The group has 16 restaurant brands in more than 60 venues across Australia, from the former Perry ventures Rockpool Bar & Grill, Rosetta, Spice Temple and Burger Project, to Fratelli Fresh and The Cut steakhouse. It is also seeking to open more than 100 The Bavarian restaurants across the country.

The group was formed in 2015-16 from the acquisition and merger of Urban Purveyor Group, Fratelli and Rockpool, and in its statement yesterday said it employs 2,400 people — a figure substantially down on the 3,000 it was claiming earlier in the year — and has an annual payroll of approximately $100 million.

In Sunday’s statement, the company appeared to blame “legacy systems” and the complexity of the awards system for the issues that have emerged.

“Like many businesses in the restaurant industry, the Group has had to work hard to replace and modernise legacy systems and procedures and that work continues,” the statement said.

“As identified by the industry body, Restaurant & Catering Australia, disparate payroll systems and the complexity of multiple shifts, sites and rosters pose an industry-wide challenge. For our part, it is one that we’re keen to resolve.”

An HR director has been appointed, the company is investing in IT, improving its monitoring of employment compliance and working with the FWO to standardise policies and procedures, RDG said.

Pash told Fairfax the business was “committed to lifting industry standards”.

PwC is continuing to work with Rockpool Dining Group and is reviewing the group’s policies and procedures to identify ways to improve the payroll process, and may also look at the wages bill for previous years to see if further payments are required.

Underpayments in the restaurant sector appears to be a widespread issue, with the FWO having an increasing focus on the problem.

The Fair Work Ombudsman said it continues to conduct an investigation in relation to Rockpool and because the matter is ongoing, “it is not appropriate to comment further at this time”.

Last year, Melbourne restaurant group Made Establishment paid $2.6 million in backpay to 162 of its 430 staff after an external audit revealed they had been incorrectly paid.

Last week, the former operators of a restaurant in Cairns were penalised a total of $168,924 for underpaying a migrant worker more than $33,000, following legal action by the FWO, while an audit of 45 sushi businesses in NSW, Queensland and the ACT, found breaches of workplace laws at 39 businesses, with inspectors recovering $746,203 for 397 workers for underpayments.

The FWO says 40% of all anonymous reports it receives relate to the hospitality sector.

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