Undercover staff were sent to spy on a Brisbane Coffee Club franchise to check if workers were being paid their proper wages and entitlements.
The Coffee Club Franchising Company took the extraordinary action believing the owners of the store were repeatedly lying to them about alleged wage theft.
The parent company is suing the former owners of the franchise in the Brisbane District Court for $500,000 allegedly owed under a franchise agreement.
‘Ghost’ employees allegedly paid off the books
According to court documents, the Coffee Club Franchising Company has accused the owners of the Hamilton Harbour Coffee Club – Qihua Yang and Xiaona Yuan – of underpaying “vulnerable” staff.
They also allege there was a system of “ghost” employees who worked in the cafe but didn’t appear in official employment records required by law.
The cafe closed in December 2018, a year after Coffee Club headquarters claimed Yang and Yuan provided false rosters and time sheets and back dated other documents, allegedly to avoid revealing they were ripping off at least three staff.
It is alleged the workers were paid as little as $12 an hour and no overtime.
It is also alleged that superannuation was underpaid.
The Coffee Club claims that the former franchise only provided further information of actual hours worked by employees after it revealed that it had sent its own undercover staff to visit the business who made observations that were inconsistent with the submitted records.
Former owners deny claims and counter-sue
Yang and Yuan, and their company Huabei Pty Ltd, did not admit the claims and argued they would never have taken the franchise if the Coffee Club had not allegedly misled them with claims the business would generate a $200,000 gross profit in the first year.
Huabei alleges the Coffee Club failed to provide training, support, ongoing assistance and advice on how to run the business as promised when they bought the franchise.
Huabei has filed a counter-claim arguing it should be compensated for the $468,619 of accumulated losses and $457,413 in franchise fees.
No court date for hearing has been set.
>> Now watch: What Is Wage Theft In Australia?
If you are not being paid your correct wages and entitlements, or if you are considering legal action to recover stolen wages, we can help.
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