The franchisor of the 85 Degrees cafe chain in Australia has been fined $1.44 million for underpayments at its franchisee outlets in Sydney.
85 Degrees Coffee Australia, which operated 85 Degrees-branded outlets in NSW and the ACT, was charged for “systematic failure to ensure compliance within its franchise network”, according to the Fair Work Ombudsman (FWO).
The FWO discovered the contraventions when it conducted proactive audits at the company. The nine affected workers engaged in cashier, baker and kitchen-hand positions at eight 85 Degrees locations in Sydney in 2019.
They were underpaid a combined $32,321, including minimum rates, overtime entitlements, penalty rates for weekend, public holiday and evening work, casual loadings, laundry allowances, and annual leave entitlements.
While 85 Degrees did not directly underpay the workers, it has been held legally liable under the responsible franchisor entity provisions.
“85 Degrees’ conduct in this matter was completely unacceptable,” said Fair Work Ombudsman Anna Booth. “The company had been on notice for some time about compliance issues in its network but failed to take reasonable steps as a responsible franchisor to address those issues.”
The penalty comes after the FWO secured $475,200 in penalties against 85 Degrees in 2022 for exploiting young Taiwanese students in Sydney. The FWO also entered into an Enforceable Undertaking with the company in 2015 over underpayments and record-keeping contraventions.
