The Fair Work Ombudsman has recovered $89,952 in unpaid wages for 36 workers after investigating 14 outlets of bubble tea chain Sharetea.
In April 2022, the regulator investigated the Sharetea franchisee-operated stores after receiving tip-offs indicating possible underpayments, supported by FWO intelligence confirming the stores engaged a significant number of vulnerable workers such as Mandarin-speaking visa holders.
Inspectors interviewed employees, managers and owners in person at stores in Sydney, Melbourne, Brisbane and Canberra, and checked employment records and payslips.
Fair Work Inspectors assessed compliance against the Fair Work Act, including with the Fast Food Award 2010 and Fast Food Award 2020. The Inspectors found only five of the 14 outlets investigated had met all obligations under the awards.
In response to the alleged breaches by the other nine businesses, Inspectors issued four Compliance Notices, recovering $88,893 for 29 employees. For payslip and record-keeping breaches, nine Infringement Notices were issued, with a total $17,428 in fines paid.
One business voluntarily rectified $1,060 for seven employees without enforcement action being needed.
Fair Work Ombudsman Sandra Parker said the findings were another warning to those at all levels of franchise chains to ensure they are compliant with workplace laws.
“It is disappointing we have had to recover nearly $90,000 in underpayments, and issue more than $17,000 in fines, due to franchisees not complying with workplace laws that protect their hard-working employees,” Ms Parker said.
“Improving compliance in the fast food, restaurant and café industry, which employs many vulnerable workers, including in franchises, continues to be a priority for us.”
“We expect all franchisees and franchisors to meet their obligations, and we have free and simple to use tools and resources available to help them get it right. Any workers with wages concerns should also contact us.”
The main issues found by FWO inspectors were the failure to pay the casual minimum wage, including appropriate junior rates; weekend penalty rates and part-time overtime rates; and failing to engage workers for the minimum number of hours for a casual.
Sharetea outlets were also found to have made or kept inadequate records and breached payslip-related requirements under the law.
There was $87,176 recovered for 32 workers in Sydney and $2,776 for four workers in Canberra. The large majority of underpayments were from one Sydney store where $78,711 was recovered for 18 employees.
This franchisee, which also received an Infringement Notice for making or keeping misleading records, is no longer operating any franchise or fast food business.
The investigation did not find any involvement in any of the contraventions by the franchisor, Sharetea Australia Pty Ltd, which had taken steps to provide education to its franchisees and undertaken audits.
Earlier this year, the FWO commenced its first court action alleging a franchisor was legally liable for the alleged contraventions of its franchisees as a “responsible franchisor” under the Fair Work Act. The case is ongoing.
Franchisors can be held accountable for contraventions by employers in their networks if the franchisor could reasonably be expected to have known that contraventions of a similar character were likely to occur and did not take reasonable steps to prevent the breaches.
In this investigation, the non-compliant franchisees were told future breaches could lead to higher-level enforcement action.