Underground Underpayment: Subway Caught Ripping Off Its Own Employees. Again.



More than $80,000 in unpaid wages to almost 200 Subway employees in New South Wales, Queensland and Victoria has been recovered, after an investigation led by the Fair Work Ombudsman (FWO).

The probe was sparked by requests for help from employees, some via anonymous tip-offs, and it focussed on 22 Subway franchises. Eighteen of them were found to be “not compliant with Australia’s workplace laws”.

The total amount of recovered wages was $81,638.82, from 167 current and previous employees.

The FWO found that the franchisees failed to pay their employees minimum wages, and entitlements like casual loadings and holiday and overtime rates. Some also failed to issue proper payslips and did not keep proper employment records.

FWO Inspectors issued seven compliance notices (requiring employers to rectify breaches of the law), nine formal cautions and nine on-the-spot fines for record-keeping and pay slip breaches totalling $5,880.

In the past two financial years, FWO investigations have recovered nearly $150,000 for underpaid Subway employees. The FWO also secured $65,438 in penalties against the former franchisee of two Subway outlets in Sydney for underpaying a Chinese worker more than $16,000.

It’s added insult to ongoing injury for Subway – the franchise is struggling in Australia, and overseas. With more than 40,000 stores internationally, it’s a bigger food chain than McDonalds by about 17 percent. But in Australia, more than 100 franchise stores have closed in the past year. But Subway’s woes are not deterring the FWO.

Fair Work Ombudsman Sarah Parker said there were a number of “ongoing lines of enquiry” into Subway’s operations.

“We encourage any Subway workers with concerns about their pay to contact us,” Ms Parker said.

“Half of the underpaid Subway employees were young workers or from a migrant background, which can make them particularly vulnerable to exploitation. For many of these workers, it might be their first job and they could be unaware of their workplace rights or scared to raise issues with their boss.

“Franchisors, especially in the fast food sector, are a priority for the Fair Work Ombudsman. Franchisors can be held legally responsible if their franchisee stores don’t follow workplace laws. They must take reasonable steps to prevent this occurring. The community expects head companies to assure themselves that all the stores in their franchise network are paying workers their correct wages and entitlements.”

Subway staff can contact the Fair Work Infoline on 13 13 94 for free workplace assistance. Employers and employees can also submit anonymous reports to the Fair Work Ombudsman online.

A report of the FWO’s investigation of the 22 Subway franchises is available at www.fairwork.gov.au.

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Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.