Franchisees of a Melbourne Gloria Jean’s outlet have been fined $110,500 after paying foreign students as little as $8 an hour.

The fines follow a federal court case which also resulted in an $80,000 penalty against the franchisee’s trading company Primeage Pty Ltd.

Fair Work inspectors had found that 22 casual employees at the Caulfield franchise had pay packets based on hourly flat rates of $8 to $10, and had been underpaid a total of $83,566 between July 2011 and April 2013.

Many of the staff were international students from non-English speaking backgrounds, a third of them aged under 21.

Inspectors had previously found that the two franchisees, Tsinman Fu and Ping Ostrovskih, had underpaid another employee when running a different business.

Judge Riethmuller said the pair were “well aware of their obligations” and their lack of a proper pay system showed “at best a reckless disregard of the obligations”.

The court found Fu’s underpayments were made deliberately when the business was underperforming. 

The employees were back-paid only after the Fair Work Ombudsman began legal proceedings.

In response to the case, Gloria Jean’s has issued a statement:

“Gloria Jean’s Coffees has training programs and support systems in place to support franchise partners in their business operations. Each Gloria Jean’s Coffees franchise partner is responsible for ensuring their business is compliant with employment law, the Fair Work Act and all relevant employment awards.”