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Saturday, April 25, 2026

Chatime Australia isn't having a Good Time - Employment Law Edition - Lexology

On Friday 2 June 2023, the Fair Work Commission handed down its Annual Wage Review 2022-2023 decision, announcing a 5.75% increase to minimum wages prescribed by Modern Awards. Bearing in mind hyper-inflation and rising unemployment rates, the Commission has also increased the National Minimum Wage to $23.23 per hour from $21.38 per hour.

In the event that a business is a National System Employer, they have a statutory obligation to comply with the National Employment Standards and any applicable industrial instruments such as a Modern Award. Following the Annual Wage Review and introduction of the Fair Work (Secure Jobs, Better Pay) Act 2022, employers must be vigilant and undertake a workplace audit to ensure compliance, or otherwise be at risk of severe financial penalties.

Case Study: Fair Work Ombudsman v Chatime Australia

In a significant decision on directors’ liability for underpayments, a court has found that although the managing director of Chatime was unaware that the bubble-tea chain was in breach of workplace legislation, he had sufficient knowledge about his obligations under the applicable Modern Award to be considered “complicit”.

Facts

In 2013, the Chief Financial Officer prepared a presentation to the managing director and his co-founder showcasing two costing models. The first model that applied Award rates had added more than $850,000 to annual payroll. The latter model applied minimum award rates but removed bonuses and required payroll to be in...



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