FWO takes legal action against franchise owing workers $40K

by Chloe Taylor23 Mar 2015
A New South Wales Bakers Delight franchise has signed an undertaking with the Fair Work Ombudsman (FWO) after an audit revealed that 26 of its employees had been underpaid almost $40,000.

The investigation into the Bakers Delight franchises came after the FWO randomly audited 81 bakeries in Victoria, finding that just 63% of them were fully compliant with their obligations and only 53% were paying their employees correctly.

This follows a string of incidents involving bakery chains – last year, Breadtop made an agreement with the FWO to ensure its employees were receiving what they are entitled to.

Legal proceedings have also been taken by the FWO against a Tasmanian bakery that owed staff almost $80,000 and the operator of a business who allegedly paid workers just $1.35 an hour.

In its investigation into the Bakers Delight franchise, the FWO assessed time and wage records for employees over a one month period in early 2014. This was looked into for the franchise’s stores in Bateau Bay and Wyong in New South Wales.

When the investigation was taking place, the franchisee was JCMA.

Investigators found that 26 employees were underpaid a total of $39,626.20, with the operators failing to comply with the relevant Modern Award (the General Retail Industry Award).

Individual underpayments were between $104 and $3672.

Conditions of the award which were not met included the apprentice base rate of pay, Saturday ordinary rate of pay, Sunday rate of pay, public holiday rate of pay, early morning shift allowance, Saturday shift allowance and Sunday shift allowance.

The franchisee consequently signed an enforceable undertaking with the FWO, with a 14 day period in which the underpayments had to be remedied. The rectifications also had to be proved to the FWO with approved evidence.

Additionally, the franchisee was ordered to provide written details of the systems it had implemented to the FWO as well as sign up to the Ombudsman’s My Account portal.

In a statement, a Fair Work Ombudsman spokesperson told SmartCompany enforceable undertakings were introduced by legislation in 2009. FWO has been using them to achieve strong outcomes against companies that breach workplace laws without the need for civil court proceedings.

A spokesperson for Bakers Delight said that the company is working with the franchisee and the FWO to correct the situation.

The FWO said in a statement that enforceable undertakings are used “where we have formed a view that a breach of the law has occurred, but where the employer has acknowledged this and accepted responsibility and agreed to co-operate and fix the problem”.
 

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