Cafe chain fined $475,000 for exploiting students

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Sydney cafe chain 85 Degrees has been fined $475,000 by the Federal Court for exploiting Taiwanese students under the guise of a “purported internship” arrangement.

An investigation by the Fair Work Ombudsman (FWO) found that between July 2016 and June 2017, eight Taiwanese students (aged 20 to 22) on working holiday visas were underpaid between $50,213 and $58,248 each over a period of just under 12 months.

They were working in the factories and retail stores of the brand in Sydney, performing up to 60 to 70 hours of work per week and encountering difficulties communicating in English.

The students were from Taipei City University of Science and Technology and came to Australia under an “internship” arrangement between the university and the Taiwan-based Comestibles Master Co – an associated entity of 85 Degrees that shares the same parent company.

“The substantial penalty sends a clear message that the exploitative conduct we have seen in this matter will not be tolerated in any Australian workplace,” Fair Work Ombudsman Sandra Parker said.

“Employers must pay the lawful minimum pay rates that apply to all employees, for all hours worked, regardless of a worker’s nationality or visa status.”

Justice Robert Bromwich said the penalties should deter other employers from engaging in similar conduct.

He illustrated that the long hours that were not paid for by overtime or penalty rates, “exacerbated the poor living conditions and general amenity” brought about by not being able to pay for suitable accommodation.

This story first appeared on our sister publication Inside Retail