Labour experts say 'exploited' restaurant staff owed more R1.3m in wages can fight back

A raid at Babel restaurant in Menlyn Pretoria and the Ocean Basket nearby has discovered staff are allegedly owed more than R1.3m in wages due to underpayments.

While there is outrage at the revelation of alleged violations of basic conditions of employment, which includes short-paying staff and not giving waiters basic salaries, experts believe there is recourse for the affected employees.

According to labour law experts, there are remedies to recoup the money and end exploitation in the restaurant industry.

Labour lawyer and DA spokesperson on employment and labour Michael Bagraim said it was up to employees to act as the department of employment and labour could recoup the money owed to them.

“The Commission for Conciliation, Mediation and Arbitration and the labour court can tell them to go back to recoup their money. The contract of employment must be in writing and the wages must be placed in a contract,” he told TimesLIVE Premium.

Restaurants that violate employment regulations should be closed but Babel’s closure would depend on the outcome of the prosecution of the owner as he is likely licensed to sell liquor and run a business, said labour lawyer Dunstan Farrell. 

“Workers who are exploited should take such management to the department of employment and labour but are much better off to join a union which gives them power to report such activities. Once they do, they will be entitled to their outstanding pay and tips. Even if they are here illegally they still have rights,” he said.

The high-end Babel restaurant and lounge in Pretoria trended at the weekend after a former staff member Mihlali Nobavu took to TikTok to expose the alleged treatment of workers.

She alleged once she was hired she was told to buy her own uniform and equipment such as a bottle opener, cigar cutter, cigar and cigarette lighters. While the 10% tip is included in the bill, she said the owners kept the tip while she was given only R100 for a 13-hour shift.

Waiters and waitresses were allegedly charged R200 for each transgression such as not wearing the complete uniform and were accused of taking cutlery. She said after receiving her R100 pay, she was told she owed R200 for missing cutlery.

Her video and a tip-off led to a raid by the labour department, the Hawks, home affairs officials and the bargaining council, where two undocumented foreigners were arrested, including the owner.

Not far from the restaurant, a foreigner was arrested while trying to collect an order at Ocean Basket.

It was found by the inspectors that both restaurants violated several employment and labour laws and did not pay waiters but only remunerated them on tips and commission.

They were also found to be noncompliant with parts of the Employment Services Act and the Immigration Act, resulting in the arrests of the owner of Babel and the Mr Delivery worker who was collecting food.

Babel is alleged to have failed to comply with the National Minimum Wage Act which states minimum wage pay of R27.58 per hour.

Cleaners at the luxury restaurant were allegedly owed R271,984.32 due to underpayments, while the waiters and waitresses were owed R295,547.28.

“The workers at Babel restaurant worked 12- to 15-hour shifts daily, which is in contravention of the daily and weekly rest period provided for in the Basic Conditions of Employment Act,” ministry of employment and labour spokesperson Thobeka Magcai said.

At Ocean Basket, the employees were allegedly owed R813,969, meaning both restaurants owed a total of R1.38m to their staff, she said.

The restaurants are also alleged to have failed to comply with the Unemployment Insurance Act.

Babel was not registered with the Unemployment Insurance Fund (UIF) and allegedly did not make any contributions to the fund nor submit monthly declarations of salary information. Ocean Basket, which was registered with the UIF, allegedly failed to submit monthly declarations of salary information, Magcai said.

Since its opening in June, Babel has not registered with the Compensation Fund and has not submitted return of earnings. Ocean Basket failed to submit the earnings for 2023 and was found to owe the Compensation Fund R72,000. They also failed to submit remuneration information of staff, detailed payroll information, annual financial statements and required Sars documents.

Ocean Basket Menlyn manager Pepe Kabalu told TimesLIVE Premium he could not comment as no statement was sent to him.

“Nothing was discussed with the labour [department]. I was inside the restaurant [when the arrest happened] and whatever happened outside, I don’t know,” he said.

Babel management told TimesLIVE Premium they met the department and members of the EFF on Monday and would issue a statement soon.

In such cases it was often those desperate for work such as the unemployed youth and foreigners who were exposed to exploitation for the sake of finding work.

A report issued in June by Stats SA found 127,437 people were employed at restaurants and coffee shops in South Africa in 2022. Their average wage in this category was R70,419 annually, which is calculated to be about R5,800 per month. 

Chairperson of the African Diaspora Forum Vusumuzi Sibanda said it was an ongoing issue where vulnerable workers, including South African citizens in need of work, are exploited at restaurants and made to pay for breaking a plate. In some cases, instead of tips being paid directly, they end up being part of their salary.

He said there are remedies to assist documented and undocumented workers who are ill-treated in the labour market, but not many people know the law and their rights.

“The Labour Relations Act says even if someone is undocumented and is exploited or fired they are allowed to report such a case and get their salaries paid before being released from [employment].

“The issue is, in an environment where jobs are scarce you find this exploitation is not just one that exposes foreigners but locals are also exposed. The issue is people want employment and it is a lot better for some to get a chance of working.”

Employment and labour minister Nomakhosazana Meth urged the public to report to the nearest labour centre should they face unfair labour practices as such matters will receive urgent attention.

“We take issues of employment and labour matters seriously,” Meth said.

However, the department was not visiting such places as customers to observe and get a full understanding of how the restaurant is run before initiating a raid, Sibanda said.

“When they investigate they should go there and eat and pay the tip and when swiping, they should see how the waiters get their money. They should do that before showing they are inspectors by first inspecting how it works. It doesn’t look like they have the skill to go there and check and protect the employees,” said Sibanda.

But there was lack of capacity as there were only 3,000 inspectors in the labour department while there were more than 250,000 restaurants, said Bagraim.

“It is vital that trade unions get more involved and if one is not unionised they should speak up. We can’t rely on inspectors who are overworked, underpaid, under-resourced and don’t have a budget to do that. It is not the department’s fault that they can only react and can’t be proactive. We need workers to come forward as they know their rights, but people are scared to lose their jobs. However they can make an anonymous report or go to social media,” Bagraim said.

The Federated Hospitality Association of South Africa (Fedhasa)  supports the recent efforts by the department of employment and labour to enforce compliance with labour regulations.

The federation said safeguarding workers' dignity and rights through safe, fair conditions is paramount, especially in the hospitality sector.

“As the voice of the collective hospitality industry, Fedhasa champions lawful employment practices, promoting equitable treatment, labour law compliant wages and secure environments for staff. We urge hospitality businesses to embrace these principles as we work towards ensuring an ethical industry poised for growth.

“While acknowledging the complexities surrounding foreigners' employment, our focus remains on advocating best practices. We believe a balanced approach, protecting local workers' rights while ensuring lawful employment across the board is crucial for the sector's sustainability,” the federation said.