The operator of the 85 Degrees cafe brand in Australia has been hit with a $475,200 penalty for exploiting Taiwanese students in Sydney under a false internship arrangement.
Eight students from Taipei City University of Science and Technology in Taiwan entered Australia on working holiday visas to participate in an ‘internship’ between the university and Comestibles Master Co Ltd, an associated entity of 85 Degrees.
The students worked at bread and cake factories in Hurstville and St Peters as well as a cafe outlet in the Sydney CBD, earning as little as $1,650 per month for working 70 hours a week.
It was found each student was underpaid between $50,213 and $58,248 over a period of just under 12 months, with 85 Degrees breaching provisions of the Fair Work Act relating to issuing pay slips, record-keeping and providing Fair Work information statements.
The Fair Work Ombudsman commenced legal action against 85 Degrees in 2021 after receiving requests for assistance from the students, with the company back-paying the workers after.
Justice Robert Bromwich found the underpayments by 85 Degrees were deliberate during a hearing at the Federal Court.
“Its most senior management must have been aware, or at least plainly should have been aware, that Australian law applied to the employment here,” said Justice Bromwich.
“The end result was undoubtedly exploitative, and the contravening conduct itself was plainly deliberate.
“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.
“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.”
The penalty is the fifth-highest ever secured in a Fair Work Ombudsman case and the Fair Work Ombudsman’s largest court penalty against a single company.