On 28 January 2025, the Industrial Magistrates Court (Court) ruled that Kahraman and Döne Karakuyu, the respondents who, in partnership, operated Newroz Kebabs and Turkish Bakery (Newroz) underpaid an ex-employee by $102,483.74. In doing so, the Industrial Magistrate ruled that the respondents breached the Restaurant, Tearoom and Catering Workers’ Award (Award) 392 times. The Court also ruled the respondents, by their own admission, breached section 49D(2) of the Industrial Relations Act 1979 (WA) (IR Act) on 738 separate occasions by failing to keep employment records for the affected worker.

The claimant, Ms Jillian Dixon, is an industrial inspector for the Department of Energy, Mines, Industry Regulation and Safety (Department). Ms Dixon started investigating Newroz in March 2022. At the conclusion of her investigation, in December 2022, Ms Dixon commenced proceedings at the Court alleging the respondents:

• failed to keep employment records, contrary to section 49D(s) of the IR Act, and
• failed to pay the affected worker the correct rates of pay and entitlements, contrary to the Award.

As part of her investigation, Ms Dixon issued the respondents with three notices to produce employment records. While some documents were produced, the respondents did not comply with the notices and during proceedings admitted they failed to keep employment records. The claimant alleged that the affected worker worked approximately 64.5 hours a week at Newroz between 2013 to 2020 and each week, he was paid $20 per hour in cash. The respondents denied the affected worker worked the hours alleged, and also denied that the Award applied to the employment relationship.

The Court considered a number of legal and factual disputes arising from the claim. One legal issue considered was whether the reverse onus of proof applied to the claim. While the claimant ordinarily proves their claim on the balance of probabilities, section 83EB of the IR Act, introduced on 22 June 2022, reverses the onus such that, unless they had a reasonable excuse, the respondents were required to positively prove they did not breach the Award if it was found they failed to keep employment records.

The respondents argued they had reasonable excuses for not complying with their obligation to keep employment records. They argued that they had delegated the day-to-day business to their son and accountants, thus having no more access to the records. Another excuse put forward by the respondents was that any records were lost after a renovation in 2017. The Court found these were not reasonable excuses, as the respondents and bookkeeper had a responsibility to keep employment records, and it was unreasonable not to do so.

This finding impacted other points of law considered by the Court. Having found there was no reasonable excuse not to keep and produce employment records, which were records relevant to the proceedings, the Industrial Magistrate, under section 83A(2)(b)(i) of the IR Act, extended the ordinary six-year limitation period to include 140 weekly pay periods from 27 April 2016 to 31 December 2018. Despite section 83EB of the IR Act coming into effect after the alleged contravention, it applied to the present case because it only affected the way the trial on the respondents’ compliance with its existing obligations was to be conducted.

In response to the alleged breaches of the Award, the respondents disputed whether the affected worker was employed in a ‘Restaurant and/or Tearoom’, or a ‘Catering Establishment’ as defined in clause 6 of the Award. The Industrial Magistrate rejected this contention for three reasons. Firstly, excluding a ‘kebab shop’ from the scope of the Award just because it is not specifically named in the Award would be too ‘overly narrow and pedantic’ and against the principles of construing industrial awards and agreements. Secondly, including kebab shops under the Award aligns with case law that ruled takeaway restaurants with optional dine-in services fit under the Award. Lastly, the presence of tables and chairs in the business meant customers could consume food on the premises and thus fit within clause 6 of the Award.

The respondents were unable to prove the affected worker did not work the hours alleged. This was because of the respondents’ inadequate, and sometimes contradictory, evidence. As such, the $20 paid for each hour of work was insufficient to cover the affected worker’s entitlements to overtime and public holiday rates. In addition to the underpayment, the Court found the affected worker did not receive meal break loading or a protective clothing allowance.

The respondents were ordered to pay the claimant $102,483.74 and the matter has been adjourned to proceedings on penalty. The full decision can be read here.