A tea franchise in hot water again!

Chatime, the bubble tea business with stores across Australia, is facing allegations it had underpaid workers more than $10m and as far back as 2009. The branches in question, operated by Chatime's Australian subsidiary Infinite Plus, had allegedly employed foreign students who were said to be too afraid to speak out and dispute their pay.

The Fair Work Ombudsman have commenced legal action against the business and various franchises. Chatime had previously been the subject of a formal complaint from the Fair Work Ombudsman (FWO) after a review of corporate-owned stores in 2016 showed 150 employees had been missing their pay, the report said. A further 2018 audit by the FWO, covering a five-month period from August to December in 2016, found 150 workers who'd been underpaid (amounting to $113,494 in NSW and $62,975 in Victoria) and ordered Chatime to repay these costs by 18 September 2018.

The complaints against Chatime are only the latest in a wave of underpayment claims from across a range of well-known brands. This continuing issue has prompted parliament to call for yet another overhaul of the franchise sector.

The General Manager of HR and Employment Relations at Workforce Guardian, Charles Watson, commented that "It feels as if over the last few years the Ombudsman's office has been taking some form of action or prosecuting every other shopping mall and food court franchise. From Dominos, 7-Eleven and Yogurberry through to Nando's, Caltex franchises and trolley collection and property services. All these brands have had completely unexplainable underpayment claims.

Over the last few years the FWO has recovered millions of dollars of underpayments and penalties from a range of franchise businesses.

Its not hard to get it right!!

Given some of the cases have evidenced that employees were being paid under $5 per hour, it is difficult to believe that such underpayments were not deliberate and taken against vulnerable workers.

Watson goes on to say that "When you have advice available from services like Workforce Guardian to ensure the correct rates are being paid, those businesses are being completely unfair to the rest of the business community, gives the rest of the correctly behaving franchisees in the group a bad reputation, is a crappy thing to do to employees, and it's either deliberate or through a failure of due diligence. Added to that is the exposure that such conduct puts on bookkeepers and accountants. If they know or ought to have known. that underpayments are occurring they have potentially become accessorily liable for their clients conduct."

If you need clarification or advice on appropriate rates of pay and related issues feel free to contact the team at Workforce Guardian on 1300 781 299.