Fair Work Ombudsman
Citation: FWO-2024-11-26-chatime-franchisor-penalty-media-release
At a glance
- Respondent
- Chatime Australia Pty Ltd
- Penalty
- $132,840
- Employees affected
- 152
- Awards cited
- MA000033
What happened
The Fair Work Ombudsman investigated Chatime Australia Pty Ltd, a franchisor of Chatime bubble tea stores, and its managing director, Chen 'Charlley' Zhao. Between August and December 2016, employees at 19 Chatime stores in Sydney and Melbourne were underpaid. Employees were paid flat rates ranging from $7.59 to $24.30 per hour, missing entitlements under the Fast Food Industry Award 2010. A total of 152 employees, including 41 junior workers and 95 visa holders, were underpaid a total of $162,533. The Fair Work Ombudsman discovered the underpayments during proactive audits.
What was decided
The Federal Circuit and Family Court imposed penalties totalling $132,840. Chatime Australia Pty Ltd received a $120,960 penalty, and its managing director, Chen 'Charlley' Zhao, received an $11,880 penalty. The court rejected Chatime Australia’s argument that the contraventions were not serious or substantial. The court found the underpayments resulted from 'ignorance and inattention'. The underpayments have been rectified in full.
What it means for employers
Franchisors are responsible for ensuring their franchisees comply with workplace laws. They must pay employees correctly and take responsibility for any breaches. Failing to do so can result in substantial penalties. Managers can be held personally liable for neglecting their duties and allowing companies to violate workplace laws.
What it means for employees
Employees, especially visa holders and junior workers, should be aware of their minimum entitlements and contact the Fair Work Ombudsman if they suspect underpayment or other workplace issues. The Fair Work Ombudsman prioritises compliance in the fast food, restaurants, and cafes sector.
Every statement above is drawn from the published decision. Read the original here:
https://www.fairwork.gov.au/newsroom/media-releases/2024-media-releases/november-2024/20241126-chatime-franchisor-penalty-media-releaseWant more cases like this?
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This summary was drafted by AI from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →