Restaurants charging illegal holiday surcharges have been ordered to pay a penalty of $13,200 each for breaching the all-inclusive pricing law on their menus by the Federal Court.
The Australian Competition and Consumer Commission has been taking action since April against businesses caught not complying with changes in the Trade Practices Act that came into effect last year. In September the ACCC instigated legal action against Helmos Enterprises (NSW) Pty Ltd, trading as Georges Bar and Grill on Sydney’s King Street Wharf, and Gourmet Goody’s Family Restaurant Pty Ltd, trading as Steersons Steakhouse in two locations in Sydney for their non-compliance.
The ACCC alleged in Federal Court that the menus of Georges Bar and Grill as well as Steersons Steakhouse failed to tell customers the full price they would pay on a Sunday or a public holiday, relying instead on a qualification indicating the application of a percentage surcharge. The practice of charging X% more on Sundays and public holidays is now a breach of the Trade Practices Act, with restaurants instead required to use different menus on these days with the holiday surcharge incorporated in the prices of menu items as an ‘all inclusive’ price.
“This is the first time that the court has ordered civil penalties, which began operation in April this year, and follows the ACCC’s first use of Infringement Notices under new provisions of the Australian Consumer Law,” ACCC chairman Graeme Samuel said. “The use of these new powers has been instrumental in ensuring that restaurants and cafes are aware of their obligations under the Act, and spreading the word that, by failing to comply, they will be running the gauntlet of the ACCC’s patience.”
Earlier this year the ACCC surveyed a number of cafés and restaurants and found a number of menus did not comply with section 53C. Infringement Notices were issued to those cafés that did not correct their menus after an ACCC warning. Proceedings were instituted against traders that did not pay the Infringement Notice penalty of $6,600.
“The ACCC takes its new powers very seriously. It is ready and able to use them to great effect, when necessary. Most importantly, such civil penalties, allow the ACCC to seek proportionate responses to breaches and enables it to more effectively promote compliance with the law.”
For more details on how to comply with the ACCC’s holiday surcharges requirements, visit our earlier article on the subject.
