Sydney cafe brand 85 Degrees Coffee fined $475,200 after paying staff less than $6 an hour

A Sydney cafe brand has been fined almost half a million dollars for deliberately exploiting young Taiwanese workers and paying them less than $6 an hour under the guise of an internship.

Cafe chain 85 Degrees Coffee Australia Pty Ltd has been fined $475,200 by the Federal Court - the second largest penalty of its kind - for exploiting eight students who had come to Australia from Taiwan under a deal arranged by the brand’s parent company.

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The students came to Australia on working holiday visas for the “internship” arrangement, but despite them being entitled to minimum wage and overtime rates, annual leave and superannuation, they were each underpaid between $50,213 and $58,248 over a period of just shy of 12 months.

Each student was paid between $1650 to $1750 per month for performing up to 60 to 70 hours of work per week in 85 Degrees’ factories and retail stores in Sydney in what Justice Robert Bromwich deemed to be a deliberate abuse of power.

“The end result was undoubtedly exploitative, and the contravening conduct itself was plainly deliberate,” Bromwich said.

“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.”

Students raised the alarm to the Fair Work Ombudsman (FWO), who last year launched legal action to ensure the workers were back-paid.

The penalty is the fifth highest ever won in a FWO case and the ombudsman’s second largest against a single 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,” FWO Sandra Parker said.

The students, from the Taipei City University of Science and Technology, worked across at an 85 Degrees cake factory in St Peters, the 85 Degrees bread factory in Hurstville and the 85 Degrees cafe outlet on George Street in Sydney’s CBD.

Bromwich said the penalties should deter other employers from a similar conduct.

Parker echoed this, saying, “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”.

“Any workers with concerns about their pay or entitlements should contact us.”