FWO catches bubble tea chain underpaying employees almost $90k

The Fair Work Ombudsman (FWO) has recovered almost $90,000 in unpaid wages for 36 workers after investigating 14 outlets of the bubble tea chain Sharetea.

The regulator scrutinised the Sharetea franchise-operated stores in April 2022 after it received tip-offs that indicated possible underpayments and found the stores employed a significant number of vulnerable workers such as Mandarin-speaking visa holders.

The investigation meant FWO inspectors interviewed employees, managers and owners at stores across Sydney, Melbourne, Brisbane and Canberra, checking employment records and payslips.

The investigation found only five of the 14 outlets had met all obligations under the fast food awards.

In response to the alleged breaches the inspectors issued four compliance notices recovering $88,893 for 29 employees and nine infringement notices for payslip and record-keeping breaches with $17,428 in fines paid.

The FWO recovered $87,176 for 32 workers across the Sydney stores and $2,776 for four workers in Canberra, the majority of the underpayments, $78,711, came from one Sydney store and was recovered for 18 employees.

One of the investigated businesses voluntarily rectified a $1,060 underpayment of seven employees without enforcement action needed.

The Sydney franchisee with the greatest level of underpayments also received an infringement notice for making or keeping misleading records and the FWO said they were no longer operating any franchise or fast food business.

The inspectors found a failure to pay the casual minimum wage, weekend penalty rates and part-time overtime rates as the predominant issues at each outlet.

It also found that the Sharetea stores made or kept inadequate records and breached payslip-related requirements under the law.

The regulator said the investigation did not find any involvement in the contraventions by the franchisor, Sharetea Australia Pty Ltd, as it had taken steps to provide education to its franchises and undertaken audits.

However, the FWO warned it could hold franchisors accountable for contraventions by employers in their networks if the franchisor could reasonably be expected to have known that infringements were likely to occur.

This measure was first seen in February when the FWO undertook the landmark legal action against a franchisor, alleging that as a “responsible franchisor entity” it was legally liable for alleged contraventions by its franchisees, including the underpayments of workers.

Fair Work Ombudsman Sandra Parker said the investigation’s findings were another warning to those involved with franchise chains to ensure their compliance.

“It is disappointing we have had to recover nearly $90,000 in underpayments, and issue more than $17,000 in fines, due to franchisees not complying with workplace laws that protect their hard-working employees,” said Ms Parker.

“Improving compliance in the fast food, restaurant and cafe industry, which employs many vulnerable workers, including in franchises, continues to be a priority for us.”