Taiwanese bubble tea chain Chatime is facing controversy following accusations of rampant underpayment to its employees in Australia going as far back as 2009.
Corporate-owned stores and the franchise network under the company’s Australian subsidiary, Infinite Plus, allegedly owe over 10 million Australian Dollars ($7 million) to its employees, according to an in-depth report by Nine Publishing (The Age and The Sydney Morning Herald).
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The report comes months after a parliamentary inquiry calling for a total overhaul of the franchise sector was conducted amidst a series of underpayment scandals involving 7-Eleven, Retail Food Group, Domino’s Pizza Enterprises Ltd and other franchise businesses.
While Chatime had not been implicated in the previous underpayment scandals, it was recently revealed that Fair Work Ombudsman (FWO) had already filed a formal complaint against the company last year.
An audit of its corporate-owned stores from August to December 2016 has revealed that 150 of its workers had been underpaid. Since most of the underpaid workers were foreign students on visas from China and Taiwan, they were too afraid to complain to authorities, the report noted.
FWO reportedly told Chatime to give an estimated 113,494 AUD ($80,000) in NSW and 62,975 AUD ($44,400) in Victoria as back-pay to their employees. The Ombudsman, which did not to make the findings public, also chose not to further penalize the firm.
However, the agency decided to file a legal action against a Chatime franchisee in Sydney earlier this month for allegedly underpaying 17 workers over $46,000 AUD ($32,400).
“It’s pretty standard picking on the little guys, not the big guys,” an insider source told The Age and The Sydney Morning Herald.
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Inside Retail reported that the FWO is currently reviewing the growing number of overseas franchise businesses in Australia.
“These businesses often implement operating models and workplace practices associated with their countries of origin,” a spokesperson from the agency was quoted as saying.
“In combination with employing migrant workers, who may be unaware of their rights, there is significant potential for non-compliance. 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 spokesperson noted that the review led to the litigations filed against PappaRich and Chatime franchise outlet operators.
Partially owned by Australian directors Charlley Zhao and Iris Qian, Infinite Plus celebrated the chain’s 100th store opening in Australia with a lavish party in November.
Both Zhao and Qian were also linked to underpayment issues at another bakery chain called Bakery Venture in 2018. Before the bakery chain went into liquidation, FWO was able to secure $350,000 in back-pay for employees and former employees during the investigation.
Featured image via Instagram/ChatimeAustralia