Chatime, the Taiwanese bubble tea business with stores across Australia, is facing allegations it had underpaid workers more than $10m beginning as far back as 2009.
Corporate-owned stores, as well as franchisees, were reportedly engaged in the scheme. The branches in question, operated by Chatime’s Australian subsidiary Infinite Plus, had allegedly employed foreign students from China and Taiwan who were said to be too afraid to speak out and dispute their pay, an in-depth report by The Age and The Sydney Morning Herald revealed.
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.
The bubble tea business was ordered to remunerate employees in New South Wales and Victoria over $113,400 and $62,900 respectively. No further penalties were imposed.
Last month, however, the FWO launched legal action against a Sydney-based Chatime store that purportedly owed 17 staff members over $46,000.
“In combination with employing migrant workers, who may be unaware of their rights, there is significant potential for non-compliance,” an FWO representative told Inside Retail.
“We are proactively auditing several emerging franchisees in the fast food, restaurant and café sector to check compliance of their business models with Australia’s workplace laws.”
The complaints against Chatime are only the latest in a wave of underpayment and wage theft scandals that have prompted parliament to call for an overhaul of the franchise sector.