Retail

Coffee Club franchisee faces $150,000 fine over underpayment allegations

Priscilla Pho /

A Coffee Club franchisee is facing fines of almost $150,000 for allegedly underpaying two young workers.

The owner-operator of the Coffee Club in Westfield Geelong, Edison Peng, and his company JMSL Pty Ltd, withheld a total of $15,412 from two workers and provided falsified payslips and records to Fair Work inspectors, according to the Fair Work Ombudsman (FWO).

Both workers — aged 19 and 20 — reached out to the FWO after being denied casual loadings and penalty rates for weekend and public holiday work, both of which are guaranteed under the Restaurant Industry Award.

They also received flat rates as low as $15 per hour of work, falling below standard award rates.

Peng is set to face court in November. In addition to the outstanding wages owed to the two workers, the FWO seeks to fine him up to $12,600 for each breach and JMSL a further $63,000 for each violation.

It has also recommended the court require Peng to complete workplace relations training through the Fair Work website.

Employers are on notice to pay “Australia’s lawful minimum pay rates” warned fair work ombudsman Sandra Parker in a statement circulated yesterday.

“The alleged payment of low, flat rates that undercut Award entitlements is completely unacceptable conduct and we treat underpayment of young workers particularly seriously,” she said.

This comes after a string of high-profile cases against businesses underpaying staff, including Subway and celebrity chef George Calombaris’ business MADE Establishment.

It is also the second time in recent years a Coffee Club franchisee has made headlines. In 2017, a Brisbane owner-operator was fined over $180,000 and made to repay his overseas worker $18,000 after months of withholding wages and threatening to withdraw the worker’s visa.

Following findings from a 2017 audit, Parker told SmartCompany she was “alarmed to discover” a high level of ignorance among small business owners, and as such, SMEs are now a focus area for the FWO.

SmartCompany reached out to JMSL Pty Ltd for comment but didn’t receive a response prior to publication.

NOW READ: Aussie workers underpaid $23 million last year: What’s the cost to those doing the right thing?

READ: “Alarmed”: Fair Work Ombudsman uncovers 99 underpaid workers in joint ASIC probe

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Priscilla Pho

Priscilla is a reporter at SmartCompany. You can contact her at [email protected].