Coffee Club franchise’s wage scandal

The FWO is taking action against a Coffee Club franchise in Victoria. Picture: Troy Jegers
The FWO is taking action against a Coffee Club franchise in Victoria. Picture: Troy Jeger
The Australian,

The Fair Work Ombudsman has taken legal action against the operator of a Coffee Club outlet in Victoria, alleging it underpaid two young workers more than $15,000 and provided false records to cover up the rip off.

The action is against Edison Peng and his company JMSL Pty Ltd, which owns and operates the Coffee Club franchise outlet at the Westfield Geelong shopping centre.

It is the second time the FWO has taken legal action against a Coffee Club franchisee.

In 2017, a court imposed more than $180,000 against a former Coffee Club cafe franchisee in Brisbane for contraventions including requiring an overseas worker to pay back $18,000 of his wages through an unlawful cashback payment.

In the new action, it is alleged the two young employees were paid flat rates as low as $15 per hour, which resulted in underpayment of junior hourly rates, casual loadings and penalty rates for weekend and public holiday work they were entitled to under the award.

It is alleged that one of the workers was underpaid $12,910 between May 2016 to August 2017 and the other was underpaid $2,502 over a three-month period in 2018.

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

“Enforcing compliance with workplace laws in the fast food, restaurant and cafe sector continues to be a priority for the FWO. Employers in this sector are on notice that they must pay all employees according to Australia’s lawful minimum pay rates.”

It is alleged that Mr Peng and JMSL breached laws during the investigation by providing false and misleading records and pay slips to Fair Work inspectors that overstated the rates the two employees were paid.

“Employers should be aware that the Fair Work Ombudsman takes allegations of false and misleading records extremely seriously,” Ms Parker said. “Any employees with concerns about false records or pay slips should contact us for assistance.”

Mr Peng faces penalties of up to $12,600 per contravention and JMSL Pty Ltd up to $63,000 per contravention. Most of the alleged underpayment has been rectified and the FWO is seeking court orders requiring Mr Peng and his company to pay the outstanding amount.

The FWO is also seeking court orders requiring Mr Peng to register with the My Account portal on the Fair Work website and complete workplace relations training.

A directions hearing is listed in the Federal Circuit Court in Melbourne on November 12.