Adelaide bubble tea chain accused of underpaying staff $186,000 goes into liquidation

·3 min read
<span>Photograph: Dave Hunt/AAP</span>
Photograph: Dave Hunt/AAP

The FunTea chain was defending a claim in court by the Fair Work Ombudsman over alleged underpayment of 20 staff

The Adelaide bubble tea bar where two women were assaulted after one complained to her boss about unpaid wages has gone into liquidation allegedly owing $186,000 to 20 workers.

A notice posted to the Australian Securities and Investments Commission announced FunTea, known as the Yuxuan Group Pty Ltd, went into liquidation on 19 November 2021 with Mark Lieberenz appointed as liquidator.

During the winding up process, the company’s remaining assets will be sold to cover outstanding costs like unpaid wages. Workers are treated as priority creditors in this scenario but the sale of assets only raises enough to repay a portion of what’s allegedly owed – if anything at all.

The move comes two months after the Fair Work Ombudsman (FWO) launched action against the company, and could effectively prevent recovery of alleged unpaid wages from the company’s owners.

Allegations of underpayment at the chain first became public in February when video of a man slapping a female employee during a dispute about alleged unpaid wages went viral. The man, who was later convicted of assault, was not her boss or employed by the tea bar.

Related: Woman assaulted during dispute over alleged unpaid wages in South Australia

According to documents filed in the federal court by FWO, the ombudsman alleged 20 workers, including the woman in the video, were paid as little as $10 an hour. The Guardian understands that the claim is being defended.

Jacky Chen, an organiser with the SA Labour Info Hub, said the workers were “extremely frustrated” as they “had been waiting for a year now”.

“The workers are extremely frustrated as they’ve fought so hard but still earned nothing,” Chen said.

Edward Cavanough, director of policy with the McKell Institute, a progressive thinktank, said the situation was “predictable” and it was “another example of the scales being tipped to business instead of the worker”.

“This is the risk with all wage theft cases,” Cavanough said. “The business that is [allegedly] culpable and responsible for doing the wrong thing has all of these options at their disposal to avoid their responsibilities. But the workers at the end of the day can’t get what they’re owed.”

SA Unions secretary Dale Beasley said insecure workers such as those on migrant visas were vulnerable, as they were at risk of slipping into poverty or becoming homeless.

“We need immediate and serious action on wage theft here in South Australia,” Beasley said, speaking generally. “We need expanded powers for our courts and tribunals to deal with phoenixing and sham contract arrangements, including power to pursue the individuals responsible.

“And once and for all we need to make it a criminal offence for an employer to dishonestly, deliberately and systematically steal the wages of an employee.”

In separate court proceedings in June, Lei “Gavin” Guo, 39, pleaded guilty to slapping the young woman in the face.

Guo was convicted in August but released on a two-and-a-half year good behaviour bond by magistrate John Fahey, who said he was a “good man” whose standing in the community had suffered significantly since the incident.

A select committee has been examining the issue of wage theft in South Australia and is expected to deliver its final report this week.

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