Yogurberry master franchisor faces Court over alleged underpayment of overseas workers

13 July 2016

The head Australian company and master franchisor of the Yogurberry frozen yoghurt chain faces legal action for allegedly short-changing young overseas workers thousands of dollars.

Four Korean nationals with limited English were in Australia on 417 working holiday visas when they were allegedly underpaid almost $18,000.

According to the Fair Work Ombudsman, the backpackers were paid just $8 an hour for up to six hours training, before being paid flat rates as low as $11 an hour.

The Agency today announced Court proceedings against YBF Australia Pty Ltd, the master franchisor of Yogurberry in Australia.

The Korean backpackers, two of them aged 19 and 20 at the time, worked at a Yogurberry outlet at the World Square Shopping Centre in the Sydney CBD.

The Fair Work Ombudsman alleges YBF Australia formerly controlled the retail outlet through its associated company Yogurberry World Square Pty Ltd.

Also facing legal action is YBF Australia part-owner Soon Ok Oh, Yogurberry World Square Pty Ltd and another Yogurberry Group company, CL Group Pty Ltd.

The Fair Work Ombudsman claims the four employees were collectively underpaid a total of $17,827 between July, 2014 and May last year.

Under the Fast Food Industry Award, they should have been paid between $14.82 and $18.52 an hour for ordinary hours.

It is also alleged the workers did not receive a special clothing allowance or superannuation entitlements and that three had unlawful deductions made from their wages.

Workplace laws relating to minimum shifts, classifications, record-keeping and pay-slips were allegedly also contravened.

Alleged individual underpayments range from $1926 to $6380.

The Fair Work Ombudsman investigated after an employee lodged a request for assistance.

The employees have now been back-paid all entitlements, except for superannuation still owing to two workers. 

However, Fair Work Ombudsman Natalie James says the involvement of overseas workers and the fact that YBF Australia had previously been put on notice of the need to pay employees’ their lawful minimum entitlements were significant factors in the decision to commence legal action.

The Fair Work Ombudsman has investigated a number of underpayment allegations dating back to 2013.

It has previously issued YBF Australia with a Letter of Caution and two Infringement Notices (on-the-spot fines) and requested the company back-pay a number of employees.

YBF Australia Pty Ltd, Yogurberry World Square Pty Ltd and CL Group Pty Ltd each face penalties of between $25,500 and $51,000 per contravention.

Ms Soon Ok Oh faces maximum penalties ranging from $5100 to $10,200 per contravention. 

The Fair Work Ombudsman is seeking a Court Order requiring the companies to commission a professional external audit of all Yogurberry stores in Australia next year and to rectify any underpayments discovered.

An Order requiring the companies to commission workplace relations training for managers is also being sought.

A directions hearing is scheduled for the Federal Court in Sydney on July 26.

Ms James says the Fair Work Ombudsman is committed to improving compliance in the hospitality industry.

The Fair Work Ombudsman’s three-year National Hospitality Industry Campaign, finalised earlier this year, resulted in more than $582,000 being recovered for underpaid employees at take-away food outlets across Australia.

Employers and employees seeking assistance can visit www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94.

An interpreter service is available on 13 14 50 and information on the website is translated into 27 different languages.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

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Media inquiries:

Ryan Pedler, Assistant Media Director
Mobile: 0411 430 902