Bubble tea chain ChaTime Australia faces legal action over an alleged $169,000 underpayment scandal at 10 outlets in Sydney and Melbourne, with boss Chen ‘Charlley’ Zhao accused of having a central role in some of the matters.
It is alleged that 152 ChaTime employees – including 42 junior workers aged under 21 and 95 visa holders – were underpaid a total of $169,320 between August and December 2016.
Individual shortfalls ranged from $58-$3990.
Wednesday’s action by the Fair Work Ombudsman came as it revealed a national investigation had recovered $731,648 in unpaid wages for 780 workers at food businesses in Australia’s capital cities, including ChaTime, Gongcha, Hot Star Chicken, PaapaRich, Sushi Izu, Nene Chicken and The Sushi 79.
Six of the seven franchises were founded overseas – five in Asia and one in the US.
The Ombudsman’s office has also started legal action against other companies as a result of the audits. They include the operator of three PappaRich outlets in Sydney, a former ChaTime franchisee in Sydney, and a company and two of its directors operating two The Sushi 79 stores in Brisbane.
The FWO action comes a day after the country’s biggest car dealer, AP Eagers, revealed it owed 6200 present and former employees a total of $4.5 million in unpaid wages and allowances. There have been a string of such revelations this year, with others uncovered at Woolworths, Commonwealth Bank, Bunnings, Super Retail Group, Michael Hill Jeweller, and even the ABC.
The FWO said the underpayments were discovered when its inspectors audited franchises that were new to Australia. They visited 76 outlets – and found more than half had underpaid staff while 80 per cent had breached at least one workplace law.
Ombudsman Sandra Parker said the investigation found ChaTime employees were paid hourly flat rates as low as $7.59 to $24.30 in the period.
The company failed to pay Fast Food Industry Award entitlements such as loadings and penalty rates, while annual leave entitlements and minimum engagement pay were also less than required.
Ms Parker said affected workers had since received their full entitlements. But the involvement of young and migrant workers was a concerning aspect.
“It is particularly disappointing to be making allegations of significant underpayments against a franchisor of this size,” she said.
Mr Zhao faces penalties of up to $10,800 per contravention and the maximum penalty for ChaTime Australia is up to $54,000 per contravention.
A directions hearing is listed in the Federal Circuit Court in Sydney on January 29.