Employee Underpayment at Dilan Restaurant: A Manager's HRM Report

This report examines a case study involving Dilan Restaurant and its manager's handling of an employee underpayment issue. The manager, operating the restaurant for ten years, was found to be underpaying a student employee, failing to provide overtime and annual leave compensation. The report details the employee's negotiation attempts, the subsequent involvement of the Fair Work Ombudsman, and the government's investigation into the wage discrepancies. The process involved auditing pay records, calculating the actual and entitled wages, and determining the underpayment amount. The manager, after initially overlooking the issue, committed to rectifying the underpayment within six months and to adhering to the minimum wage standards going forward, including overtime payments. The report highlights the manager's perspective, the legal implications, and the steps taken to resolve the situation, emphasizing the importance of compliance with employment laws and ethical workplace practices.

RUNNING HEAD: HRM 0
Dilan restaurant and coffee shop
People and culture

HRM 1
Contents
Executive summary...............................................................................................................................2
Over view and role of the manager........................................................................................................3
Scenario one..........................................................................................................................................3
Scenario two..........................................................................................................................................3
Scenario three........................................................................................................................................4
Process conducted by the ombudsman..................................................................................................4
References.............................................................................................................................................6

HRM 2
Executive summary
The report comprises the job role of the manager of Dilan restaurant and coffee shop. The
manager conducted all the necessary tasks required in the café. But he took advantage of the
student employee and underpaid him and did not provide for the overtime payments and
annual leaves. The report comprises the scenario, in which employee contracted to the
manager for resolving his issue.
The employee complained at fair works and government assessed all the concerning matter.
The manager confronted that he will pay underpayment money within the six months for one
year. The manger also confirmed to keep up to date future wages.

HRM 3
Over view and role of the manager
I am a manager at Dilan restaurant and coffee shop which has been operating from last ten
years. Being a manager at Dilan, my job role is to look out day to day operations,
management and training of the employees along with paying them on the regular intervals.
The recommendations are also made on the basis of the customer preferences. The flexible
working shifts are provided to the staff throughout the week. The owner of Dilan is accused
of taking advantage of his student employee as the employees were underpaid, not given
enough annual leave, not paid for overtime payments and sick leaves (Berg and Farbenblum,
2017).
Scenario one
Being part of the role play, I was contracted by the employee for the contract signed. As per
the contract, the employees were entitled to get $15 per hour. Although the minimum wages
has been revised and at present it is $18.93 per hour. The employee negotiated regarding
higher rate of wages but I was not interested in paying the minimum wage and overlook the
matter by paying $15 per hour. It is because the employee is an international student and I
can be beneficial by taking advantage of the present scenario. Being a manager I took
advantage of the student’s obligation as it was known that student will not leave the job no
matter how much he is paid.
The employee approached to me for discussing the contract. The employee speaks to review
the salary and asked is there any flexibility in the salary. It is because, the present minimum
wage rate is $18.93 and the employee was paid less than the minimum. I replied to the
employee that he is great and believes in hard work but his knowledge is questionable in the
industry. The employee raised his concern by representing that he is aware of the Australian
law and should be paid minimum wage which is $18.93. As far as the experience is
concerned, he was working from last 2 years. I decided to overlook the matter and asked is
there any help wanted by the employee. The employee anticipated to hire more employees for
the extra burden of work. I committed employee to fix the issue and visit after two weeks
(Bishop and Cassidy, 2017).

HRM 4
Scenario two
I was quite busy and could not response to the employee. After waiting for the two months,
employee decided to go to fair works ombudsman for raising his concern.
Scenario three
The employee went at the fair works and explained all the matter regarding the workplace.
The government committed to inspect the concern and take necessary actions against me if it
is proved that employee are underpaid. The government collected all the information
concerning employee and café (Bishop and Chan, 2019).
Process conducted by the ombudsman
It comprised steps given below:
 The first step was taken by the authority of ombudsman to find out the time employee
has been underpaid. The pay record for the complete period of employment was
audited along with the reason of underpayment (Preston, 2018). It was find out by the
authority that the employee was underpaid for the last one year.
 Calculation was done of the amount employee was actually paid for the period being
assessed. The total amount is the gross amount paid before tax was deducted which is
$50,915 and not the amount employee got in the bank account ($34,367). The
employee was supposed to be paid $34, 367 after deduction of tax.
 On the basis of the number of hours worked and the days worked, the employee was
entitled to be paid $41,241(after tax). This amount followed the minimum pay rate.
Along with the basic salary, employee was entitled to be paid for the extra hours
worked on the weekends. The extra hours worked amounted to $1,362.
 The underpaid amount was also calculated by the government which was $6,874. It
was calculated by reducing the amount actually paid from the total amount employee
should have been paid (Cai and Liu, 2015).
 The government reached to the decision that the employee should be paid back as
soon as possible. It should be included in the pay records of the employees. It can be
done by me as a part of the separate payment.
 I negotiated with the employee to pay the back pay over the certain period of time.
This condition was comprised in the contract signed with the employee. It was signed

HRM 5
by me and employee and signed copies were kept by both (Chatterjee, Singh and
Stone, 2016).
 The government informed me to keep up-to-date future wage increase.
Finally, I committed the mistake and confronted that underpayment money will be paid
within the six months for the one year. I even decided not to take advantage of the student
employees and pay the wages as per the recent wage rate which is $18.93 per hour which is
the minimum wage rate. I ensure to pay for the extra hours worked along with the salary.

HRM 6
References
Berg, L. and Farbenblum, B., 2017. Wage theft in Australia: Findings of the national
temporary migrant work survey. Available at SSRN 3140071.
Bishop, J. and Cassidy, N., 2017. Insights into low wage growth in Australia. RBA Bulletin,
March, pp.13-20.
Bishop, J. and Chan, I., 2019. Is Declining Union Membership Contributing to Low Wages
Growth? (No. rdp2019-02). Reserve Bank of Australia.
Cai, L. and Liu, A.Y., 2015. Wage differentials between immigrants and the native-born in
Australia. International Journal of Manpower, 36(3), pp.374-396.
Chatterjee, A., Singh, A. and Stone, T., 2016. Understanding wage inequality in
Australia. Economic Record, 92(298), pp.348-360.
Preston, A., 2018. The structure and determinants of wage relativities: evidence from
Australia. Routledge.