In August 2017, the Fair Work Ombudsman (FWO) reported underpayment of minimum-wage rates, casual loadings, overtime rates and penalty rates for weekend and late-night work at Melbourne-based Meatball and Wine Bar totalling $14,149.83.

The underpayments occurred between July 4 and October 2 in 2016, but were corrected in June 2017, the FWO says, before the agency commenced legal action.

In August, the FWO announced it had “secured a $31,320 penalty” against the group. The agency had sought a penalty of between $121,500 and $140,940, but judge Alister McNab ordered that the company instead pay the minimum penalty.

Meatball and Wine Bar was ordered to pay the discounted amount for several reasons. One was that the FWO’s initial media release about its findings on Meatball and Wine was ruled as “adverse publicity”. Judge McNab cited a Victorian case from 2008 that ruled “publicity was adverse when reporting was ‘unfair or incorrect’.” The court heard that Meatball and Wine Bar’s profits had declined by over $200,000 in the quarter immediately following publication of the media release.

The discovery of underpayments at Meatball and Wine Bar was part of a larger investigation that recovered $471,904 in underpaid wages for 616 workers in Melbourne, Sydney and Brisbane. Of the businesses that allegedly breached workplace laws, only one company-specific media release was issued, naming Meatball and Wine Bar, and owner Matteo Bruno. A general media release about the overall investigation and fines incurred also named Meatball and Wine Bar, but did not name any of the other businesses involved.

According to the FWO release, a key factor in taking action against Bruno was his “alleged deliberate disregard for workers’ entitlements, including those of vulnerable young and migrant workers.” (The employees were wait staff and kitchen hands, and all four were in their twenties. Eleven of the 26 held working holiday or student visas.)

“We challenged it … but by that stage they’d already published media releases, my name was all over, it was all negative,” Bruno tells Broadsheet.

He is now considering legal action against FWO for defamation against him and Meatball and Wine Bar. “The fact that they named me, said all these things that were derogatory, and then retracted them the moment they were contested, that’s not acceptable.”

The judge also accepted the underpayments were not deliberate, the restaurant group had no prior history of similar conduct, and that the amount of missing wages was three per cent of the company’s total for the three-month audit period.

The FWO declined Broadsheet’s invitation to comment on the case except to say it was considering the court’s judgment.

The FWO discovered the pay disparity during an investigation of randomly selected food outlets in three precincts in Australia, including Richmond’s Victoria Street.

The investigation found that Meatball and Wine Bar had misclassified its employees, and had subsequently been paying the wrong award rates to 26 workers across three of its restaurants in Richmond, Collingwood and the CBD.

“[Fair Work] had said we’d misclassified some employees, so what’d happened is we’d paid the award amount, but the wrong classification. The amount the employees were getting paid wasn’t an arbitrary amount … it was the award amount, but [for] a level one instead of a level two, the majority of them,” Bruno says.

Bruno attributes the underpayment to a misunderstanding on the company’s part of the award. “When new employees were brought on it was as a level one, then after a few months pay rates would be adjusted … that was the understanding.”

Under both the Restaurant Industry Award and the Hospitality Industry (General) Award, a level-one waiter is responsible for setting and clearing tables, not service to customers. A level-two waiter can supply, dispense or mix liquor, serve wine and undertake general waiting duties involving food and drinks.

“My restaurants are licensed, [the staff paid as level one] may not serve alcohol, but there may be times when they do, so technically, yes, they should have been level two,” says Bruno.

The highest underpayment during the audit period was $1419.16 for a person working as a waiter and barista at Meatball and Wine Bar’s Flinders Lane venue. Bruno says that employee still works for Meatball and Wine Bar and has worked for the company “since day one”.

Bruno’s group is one of many prominent hospitality businesses that have been in the news for wage underpayment recently. Last year George Calombaris’s Made Establishment group paid workers back after admitting to underpaying 162 employees $2.6 million two years earlier.

In May last year workers accused pâtissier Adriano Zumbo of underpaying staff at some of his pastry stores.

In June, Rockpool Dining Group denied FWO allegations of underpaying staff at eight of its restaurants.