Coffee Club franchisee backpays $36,000 after investigation

By Nick Hall | 29 Oct 2019 View comments

Just days after industry stalwarts warned of increasing migrant worker exploitation, a Coffee Club franchisee in Western Sydney has become the latest to fall foul of the disturbing trend.

An investigation by the Fair Work Ombudsman (FWO) revealed that the Blacktown café underpaid a waitress more than $36,000.

According to inspectors, the worker, who is a Korean national in Australia on a working holiday visa was paid flat hourly rates of between just $10 and $15.50. However, under the Restaurant Industry Award 2010, she was entitled to ordinary hourly rates including casual loading of up to $25.28, up to $30.33 on weekends and up to $50.55 on public holidays.

Additionally, the operator also admitted that it had failed to issue any pay slips to the worker, pay employee superannuation or keep any employment records between September 2016 to October 2018.

Following the investigation, operator Sean & Eddy Pty Ltd, along with sole director Ji Hae Hong have signed a court-enforceable undertaking with the FWO.

Coffee Club franchisee undertaking

By entering a court-enforceable undertaking, the Coffee Club franchisee has committed to overhauling its workplace practices.

Under the terms of the undertaking, the company must engage independent external auditors to check that all employees receive correct entitlements moving forward, while also rectifying any errors.

In a further show of solidarity, Hong will also issue a letter of apology to the worker, and place a company notice in the local paper apologising.

Sandra Parker, Fair Work Ombudsman said the undertaking was necessary as the outlet will undoubtedly face ongoing scrutiny from inspectors.

“The Fair Work Ombudsman will closely monitor compliance with the court-enforceable undertaking and will not hesitate to litigate if there are further breaches of workplace laws,” Parker said.

Migrant worker exploitation

While the Blacktown Coffee Club franchisee has committed to rectifying past issues, the threat of widespread sector non-compliance looms large.

Just last week, 7-Eleven CEO Angus McKay suggested that the strict visa conditions for international students had placed migrant workers in a vulnerable state.

“With a seemingly endless supply of labour, and with students working to pay off their studies, their rent, some employers think they can take advantage of these employees, especially the foreign students,” he said.

The industry leader warned other franchisors and operators to monitor their network closely, ensuring that all workers under the banner understand their rights and responsibilities.

Parker agreed, revealing that the FWO had placed a renewed focus on migrant worker exploitation, particularly in light of the latest Coffee Club franchisee failing.

“The Fair Work Ombudsman has no tolerance for employers who pay migrant workers flat rates that are below the pay they are lawfully entitled to under the relevant award. Migrant workers can be particularly vulnerable due to their visa status but are entitled to the same pay as any other worker,” Parker said.

“Improving compliance with workplace laws among franchises in the fast food, restaurant and café sector is a priority.”