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An employer that didn't directly underpay workers nonetheless should have reasonably known its franchisees were breaching the Fair Work Act, the Federal Court has ruled in fining it $1.44 million.

This is the second underpayments penalty for 85 Degrees Coffee Australia; the first was in November 2022, when it was fined $475k for underpaying eight employees.

In the proceedings at hand, 85 Degrees – which was the "responsible franchisor" of the 85°C Daily Café brand operating across NSW and the ACT – admitted that it could reasonably be expected to have known that eight of its franchisees were underpaying employees' entitlements...