Case Law: Bubble tea franchise underpaid vulnerable workers
Taiwanese company Chatime, the largest teahouse franchise in the world with a presence in over 62 countries selling hot and cold bubble tea, has received a hit to its brand over negative news coverage regarding the underpayment of wages to vulnerable workers.
The Fair Work Ombudsman has secured penalties of $132,840 against the Australian arm of Chatime for the underpayment of $162,533 across a period of five months for 152 employees (95 visa holders) across 19 stores throughout Sydney and Melbourne with some workers being paid flat rates of $7.59 per hour.
Fair Work Inspectors found that Chatime, covered by the Fast Food Industry Award 2010 underpaid wages across ordinary hourly rates, overtime rates, casual loading and penalty rates for weekend, night and public holiday work.
Fair Work indicated there was a need to send a message to employers who, with Judge Manousaridis quoted as saying 'fail to ensure' employees are paid their minimum entitlement will face 'substantial penalties'.
Judge Manousaridis went further and issued a direct penalty against Mr Zhao, the Managing Director.
“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.
If the new 1 January 2025 legislative changes for criminalising wage underpayments had applied here, then there would have been the possibility of Mr Zhao receiving a prison sentence as well as a direct penalty.
