Restaurant chain Outback Steakhouse accused of underpaying workers via traineeship arrangement

Food retailer Outback Steakhouse has been accused of underpaying its workers through the use of a traineeship program, which it is claimed resulted in workers being paid at around half the adult casual rate despite little training being on offer.

Fairfax reports employees at Outback Steakhouse were asked to sign a three-year hospitality traineeship contract, which allowed the restaurant chain to pay workers rates 50% less than award rates.

Read more: Fair Work Ombudsman audits more than 80 Wollongong businesses in crackdown on youth underpayment

Lawyer at McDonald Murholme Bianca Mazzarella tells SmartCompany younger workers tend to be at the centre of similar cases involving underpayment claims.

“Companies will offer traineeships that are a ruse where the training doesn’t occur, which they use to underpay staff,” Mazzarella says.

“Employers will often make young employees sign the documents, but in reality, employees don’t know what they’re signing up for.”

Outback Steakhouse workers interviewed by Fairfax claim the restaurant offered minimal training to its employees, with the employees alleging the restaurant only provided a total of four hours of training.

The agreement Outback Steakhouse employees entered into outlined employees must be trained for 20% of the time they work, reports Fairfax, or around 4.2 hours each week. It is claimed workers were being paid $11.80 per hour, compared to the award rate of approximately $22.

The employees claim the details of the traineeship were never explained to them, and they believe the restaurant was “taking advantage” of them.

The South Coast Labour Council revealed the cases of underpayment, with secretary Arthur Rorris telling Fairfax the council was calling for an independent inquiry into exploitation surrounding traineeship systems.

“Let’s be clear, a full-time university student does not knowingly sign a three-year traineeship contract as a waitress just so that she can cut her wages in half,” Rorris told Fairfax.

If you’re offering traineeships, ensure transparency

Whilst Mazzarella says cases like these aren’t overly prevalent, she notes concerns over traineeships have been raised before in the sector.

“I wouldn’t say it’s rampant, but some prominent food chains have taken advantage of younger workers like this in the past,” she says.

“Younger workers are more likely to sign into these agreements because they view traineeships or internships as a way to get their foot in the door.”

An underpayment case was levelled against burger franchise Grill’d in 2015, after an employee on a $15.20 per hour traineeship wage asked for full award entitlements.

Lower pay rates for traineeships come about because businesses can claim there’s a cost to training the workers, says Mazzarella, and otherwise award rates would have to be respected.

Mazzarella notes cases like this are rare, and acknowledges a number of businesses genuinely offer traineeships to provide employees with “great” skills and accreditations.

For those businesses, she advises a high level of transparency with the workers over the terms of the agreement, which can prevent issues later on.

“Employees must agree to the conditions and know fully what they’re getting into,” she says.

“Get some proper agreements in place, and make sure all employees take the contracts home and get some advice. Ensure it’s clear what the benefit is for the employee, and what they’re getting in exchange.”

SmartCompany contacted Outback Steakhouse for comment this morning, but did not receive a response prior to publication.

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