A national restaurant chain signed up its young workers to government-subsidised hospitality traineeships which were used to reduce their pay to half the national award rate.
The Outback Steakhouse asked young employees to sign up for the training which turned out to be a three-year contract. Workers claimed it offered little relevant training.
The restaurant paid the trainees at rates much lower than the national restaurant industry award.
The South Coast Labour Council uncovered the training program when it tried to recover unpaid wages on behalf of young people featured in Fairfax Media's investigation into rampant exploitation of student workers in Wollongong cafes, restaurants and retail.
"The Australian taxpayer is effectively funding this exploitation of young workers using the Vocational Education and Training system," South Coast Labour Council secretary Arthur Rorris said.
Among those seeking backpay is Kiara Robinson, 22, who was enrolled in a training program with Outback Steakhouse in Fairy Meadow in 2014.
She says she received no on-the-job training apart from about two sessions that involved filling out a booklet and answering what she described as very basic questions. Employed there for nine months, she said the sessions lasted up to two hours each.
"There was no training while we were working," she said. "It was basically doing some paperwork to get a traineeship."
After she resigned, Ms Robinson received a "statement of attainment" as part of a Certificate III in Hospitality. It says she attained seven units including working effectively with others, working in hospitality and in a customer service environment. It also covered units in safe and hygienic food handling, sourcing information on the hospitality industry and showing social and cultural sensitivity.
Ms Robinson was paid $11.80 per hour, about half the adult casual rate of $21.94 which Mr Rorris said she was entitled to for serving food and alcohol (as a level 2 employee under the Restaurant Award) in 2014.
"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," Mr Rorris said.
"All of this is happening under the noses of the government and its 'Smart and Skilled' training system that has allowed private training companies to use taxpayer's money.
"We are calling for an independent inquiry into the traineeship system and mounting evidence of exploitation that is emerging."
Icon Restaurants Australia, which trades as Outback Steakhouse, still uses a 2002 wage agreement which says an employee who enters a traineeship is paid at "the minimum rate" for the duration of a traineeship. It also says a "trainee will undertake an average of 20 per cent of time in training" and their pay is to be reduced by this same percentage.
Her employment records show that Ms Robinson was registered as a trainee from January 20, 2014 when she started working for the Outback Steakhouse Fairy Meadow. However, her training contract was not signed until March 7 that year.
She was paid at the same minimum rate of $11.80 per hour from January 20 and after she started training.
The traineeship contract her employer completed and signed says Ms Robinson was working 21 hours a week and that she was one of 16 trainees working at the restaurant.
According to the restaurant's wage agreement, the 21 hours should have been matched with an average 4.2 hours of training per week.
But according to her pay records, Ms Robinson was only paid for about 388.5 hours in total for the 37 weeks she was employed. This means she worked an average of 10.5 hours per week and not the 21 hours stated on her training contract.
Based on the actual number of hours she worked, Ms Robinson should have spent a total of 77.7 hours in training - about two hours per week.
Ms Robinson said she and about 15 other employees were called into a room and rushed into signing documents to enrol in a training scheme. She had no idea it was a three-year traineeship.
"They said there is an opportunity to get some training and quite a few of us thought no worries, no cost to us," she said.
"It was pretty rushed. We weren't told anything about the traineeship and how it related to our pay."
Another former Outback Steakhouse employee who did not want her name published told Fairfax Media she attended only three or four training sessions during her 15 months of employment at Outback Steakhouse Fairy Meadow. She was paid the same rate as Ms Robinson for serving food and alcohol.
"Basically nothing was taught to us," she said. "I didn't find it useful to our job at all.
"It was a workbook - questions and some diagrams. It was theory, but didn't cover anything we did in a practical sense."
Mr Rorris said the traineeship should never have been approved because Ms Robinson worked an average of half the 21 hours in her traineeship contract and because she had no regular hours of work.
The Department of Industry which administers the training subsidy under the state government's Smart and Skilled vocational training program said anyone doing a part-time traineeship must be offered regular employment and training each week, at least a minimum of 15 hours per week for traineeships of less than two years and 21 hours per week for traineeships of two years or more.
As a full-time university student, Ms Robinson now questions how she was enrolled in the government-subsidised traineeship.
"I wasn't getting enough hours of work to be a trainee anyway," she said.
"It makes me pretty angry that they were underpaying me and getting incentives from the government at the same time.
"They didn't explain it to us."
Ms Robinson said she felt exploited by the restaurant.
"We were just a bunch of 18-year-olds in our first job," she said.
"I don't think we should have been expected to know what we were getting into and I definitely think they took advantage of that."
A full page of her "NSW Apprenticeship/Traineeship - Training Plan" marked Part 2 which lists formal training details is blank and Part 3, which should outline further details of her training, is missing.
Mr Rorris has called for the suspension of all new hospitality industry traineeships run through private registered training organisations until an extensive audit of existing traineeships is undertaken.
NSW Teachers Federation president Maurie Mulheron said its state executive carried a resolution on April 4 in support of the campaign to stop the exploitation involving private registered training organisations. It supports the Labour Council's call for an independent inquiry into the NSW traineeship system.
"The federation believes what has been uncovered may just be the tip of the iceberg," Mr Mulheron said.
"Federation is concerned that there may be significant numbers of school-aged children as well as university students forced to sign documents resulting in them being underpaid."
A spokeswoman for Outback Steakhouse confirmed some of its employees participate in training courses through a registered training organisation and Apprentice Support Australia.
"It is the responsibility of each individual employee to complete course requirements to secure qualifications," she said.
"Employees remuneration is not discounted if they are enrolled in a traineeship and fully complies with Outback Steakhouse's Certified Agreement. This is lodged under Icon Restaurants Australia Pty Limited.
"Fair treatment of all employees is core to the business and Outback Steakhouse encourages employees with concerns about their pay or training to contact the company directly."
The company which delivers training to Outback Steakhouse employees said Ms Robinson did not complete the training program but it "conducted an appropriate amount of training for her program".
The training company rejected the claim that Ms Robinson only undertook about two sessions of training saying this was "not accurate based on her progress through the program".
"It is our practice to provide all trainees with a full training plan," the company said.
"At the completion of her units, Ms Robinson signed her training log confirming she had completed all hours necessary."
The training company did not reply to Fairfax Media's requests for a copy of the logbook and the actual number of hours Ms Robinson completed as part of her training.
When Mr Rorris asked for copies of Ms Robinson's records, the training company replied in an email on March 22 that it was only required to keep documents for two years and the "records are no longer available".
The Australian Business Apprenticeships Centre provided Ms Robinson with a copy of her training plan which it said the training company had provided.
A spokesman for the NSW Department of Industry said Training Services NSW is currently monitoring the performance of training providers associated with the company. The providers received state government subsidies through its Smart and Skilled program.
"Stringent quality controls govern the delivery of training subsidised by Smart and Skilled and protection for students is our absolute priority," the department spokesman said.
"All Smart and Skilled training providers are subject to regular monitoring and review and we actively encourage students to contact Training Services NSW at any time if they are not satisfied with the training being delivered.
"All such concerns are taken very seriously and while we cannot comment on ongoing investigations we can confirm Training Services NSW is currently undertaking performance monitoring of Smart and Skilled training providers associated with [the company]."
A spokesman for the Australian Skills Quality Authority said it has not received complaints about the company which has active registrations.
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