The Australian franchisor of the Chatime bubble tea chain, and its managing director, were fined a total of $132,840 for underpayments of more than $160,000.
The Federal Circuit and Family Court imposed a $120,960 penalty against Chatime Australia Pty Ltd. The business also owns and operates a number of outlets.
Chatime Australia managing director Chen ‘Charlley’ Zhao was hit with a $11,880 penalty after the court found he was involved in the underpayment of casual loadings and weekend penalty rates.
Between August and December 2016, Chatime Australia paid employees at stores it directly operated flat rates as low as $7.59 to $24.30 per hour. It did not pay Fast Food Industry Award entitlements such as loadings and penalty rates.
The wage theft from 152 employees – including 41 junior workers aged below 21 and 95 visa holders – amounted to $162,533. Many of the visa holders were international students.
Unacceptable conduct from franchisor
Fair Work Ombudsman Anna Booth said “The conduct in this matter, by a franchisor of this size, is completely unacceptable. We expect franchisors to not only pay their own staff correctly but to take responsibility for ensuring that their franchisees comply with the law.
“The large number of vulnerable employees underpaid in this matter was concerning. We treat cases involving underpayment of junior workers and visa holders particularly seriously,” Booth said.
The FWO discovered the underpayments during proactive audits.
Workers were underpaid at 10 Chatime outlets across Sydney in Bondi Junction, Chatswood, Wetherill Park and the CBD. Nine Chatime outlets across Melbourne, in Dandenong, Doncaster, Glen Waverley, Cheltenham and the CBD also underpaid staff.
Individual underpayments ranged from $58 to $3,990. The underpayments have been rectified in full as a result of the FWO’s proactive audit.
Judge Manousaridis said the underpayments resulted from “ignorance and inattention”.
“Penalties should be set to signal to persons who manage companies that they will be met with substantial penalties if, through their neglect, they permit companies they manage to contravene terms of an award or any other industrial laws or instruments that might apply,” Judge Manousaridis said.
