[Australia] $475,000 fine for Sydney cafe chain found underpaying ‘interns

[Australia] $475,000 fine for Sydney cafe chain found underpaying ‘interns
14 Nov 2022

An Australian café chain has been fined $475,000 by the Federal Court after it was found to have underpaid workers under the guise of an internship programme at its Sydney locations, 9News reports.

The 85 Degrees café brand operates factories and cafés. It was revealed to have exploited a group of eight young Taiwanese students, paying them less than $6 per hour.

The students were all reportedly aged between 20 and 22 when they worked for the café chain as "interns" for a year between 2016 and 2017.

They were paid between $1,650 to $1,750 per month for performing up to 60 to 70 hours of work per week in 85 Degrees factories and retail stores in Sydney.

Each of the students was found to have been underpaid between $50,213 and $58,248 over the 12-month period, despite being entitled to the minimum wage plus entitlements such as overtime.

85 Degrees only gave backpay to the workers after the Fair Work Ombudsman launched legal action against the company in 2021.

The Federal Court fine of $475,000 is reportedly the second largest court penalty secured by the Fair Work Ombudsman against a single company.

The café chain has come under the radar of the ombudsman before.

In 2015, 85 degrees was discovered underpaying other visa holders and entered into an enforceable undertaking with the ombudsman.

The Fair Work Ombudsman reportedly began investigating the latest case following a request for help from the students involved. Their university in Taiwan arranged the internship with the parent company of 85 Degrees.

Four of the students were working at an 85 Degrees cake factory in St Peters, two worked at the 85 Degrees bread factory in Hurstville, one worked across the St Peters factory and the 85 Degrees café outlet in Hurstville and one worked at the 85 Degrees café outlet on George Street in the Sydney CBD.

Justice Robert Bromwich found that the underpayments by 85 Degrees were deliberate.

"Its most senior management must have been aware, or at least plainly should have been aware, that Australian law applied to the employment here. The end result was undoubtedly exploitative, and the contravening conduct itself was plainly deliberate," Justice Bromwich said.

He reportedly rejected arguments from 85 Degrees that the students were not especially vulnerable under the internship.

"I am unable to accept that the intern employees were anything other than highly susceptible to exploitation in the sense of being in no realistic position to resist being overworked and underpaid," Justice Bromwich said.

"The long hours that were not paid for by overtime or penalty rates, longer than other employees, exacerbated the poor living conditions and general amenity brought about by not being able to pay for suitable accommodation."

Justice Bromwich reportedly said the high penalty ought to deter other employers from similar behaviour.

 

Source: 9News

(Link and quotes via original reporting)

An Australian café chain has been fined $475,000 by the Federal Court after it was found to have underpaid workers under the guise of an internship programme at its Sydney locations, 9News reports.

The 85 Degrees café brand operates factories and cafés. It was revealed to have exploited a group of eight young Taiwanese students, paying them less than $6 per hour.

The students were all reportedly aged between 20 and 22 when they worked for the café chain as "interns" for a year between 2016 and 2017.

They were paid between $1,650 to $1,750 per month for performing up to 60 to 70 hours of work per week in 85 Degrees factories and retail stores in Sydney.

Each of the students was found to have been underpaid between $50,213 and $58,248 over the 12-month period, despite being entitled to the minimum wage plus entitlements such as overtime.

85 Degrees only gave backpay to the workers after the Fair Work Ombudsman launched legal action against the company in 2021.

The Federal Court fine of $475,000 is reportedly the second largest court penalty secured by the Fair Work Ombudsman against a single company.

The café chain has come under the radar of the ombudsman before.

In 2015, 85 degrees was discovered underpaying other visa holders and entered into an enforceable undertaking with the ombudsman.

The Fair Work Ombudsman reportedly began investigating the latest case following a request for help from the students involved. Their university in Taiwan arranged the internship with the parent company of 85 Degrees.

Four of the students were working at an 85 Degrees cake factory in St Peters, two worked at the 85 Degrees bread factory in Hurstville, one worked across the St Peters factory and the 85 Degrees café outlet in Hurstville and one worked at the 85 Degrees café outlet on George Street in the Sydney CBD.

Justice Robert Bromwich found that the underpayments by 85 Degrees were deliberate.

"Its most senior management must have been aware, or at least plainly should have been aware, that Australian law applied to the employment here. The end result was undoubtedly exploitative, and the contravening conduct itself was plainly deliberate," Justice Bromwich said.

He reportedly rejected arguments from 85 Degrees that the students were not especially vulnerable under the internship.

"I am unable to accept that the intern employees were anything other than highly susceptible to exploitation in the sense of being in no realistic position to resist being overworked and underpaid," Justice Bromwich said.

"The long hours that were not paid for by overtime or penalty rates, longer than other employees, exacerbated the poor living conditions and general amenity brought about by not being able to pay for suitable accommodation."

Justice Bromwich reportedly said the high penalty ought to deter other employers from similar behaviour.

 

Source: 9News

(Link and quotes via original reporting)

Leave a Reply

All blog comments are checked prior to publishing