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EXCLUSIVE

Bakers Delight faces legal challenge over wages

Bakers Delight workers, some on $8 an hour, are being kept on an outdated contract from the unpopular WorkChoices era that drastically reduces weekend penalty rates.

Fairfax Media has obtained payslips and store rosters from Bakers Delight revealing its staff – often teenagers – are routinely being paid vastly less than the minimum award rates for working weekend shifts in bakeries across Victoria.

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Claims of wage theft

Bakers Delight has been taken to the Fair Work Commission over claims it has underpaid workers.

In the latest example of a so-called "zombie" agreement, the bakery chain is still using a 2006 pay deal which was scheduled to expire in 2009.

It means that younger sales staff at the company's Victorian stores get paid between $8 and $16 an hour, but penalty rates are restricted to just 110 per cent on weekends – far below the weekend rates of up to 200 per cent enshrined in the national retail industry award.

For a four-hour Sunday shift, under 16-year-olds at some Bakers Delight stores are earning $38.50 overall, but would receive $70 if they were paid under the award, an analysis shows.

The controversy is the latest to surface over the issue of weekend penalty rates in Australia, and follows a string of high-profile scandals revealed by Fairfax Media involving big retail and fast-food corporations exploiting legal loopholes to pay lower rates.

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The Fair Work Commission is expected to hand down its long-anticipated ruling on whether to reform weekend penalty rates in several sectors nationally, including retail in just a few weeks.

Bakers Delight now faces an attempt to force it to start paying higher penalty rates in Victoria, after a 15-year-old female bakery worker applied for the Fair Work Commission to terminate the 2006 deal and move staff onto the award or a higher-paying agreement.

Pay shock

The girl's father, Brad Marsh, said his daughter was left hundreds of dollars a month worse off due to the substandard, decade-old agreement while working at a Bakers Delight in Melbourne's inner east.

"When she got her first pay cheque, she said she couldn't believe how bad it was," he said.

"The company is bringing down their labour costs by holding on to this 10-year-old agreement, while other independent bakers pay their workers fairly."

Bakers Delight has 700 company-run and franchised bakery stores, the bulk of which are in Australia. It also has operations in Canada, the US and New Zealand.

The embattled 2006 agreement governs the pay and conditions at all Bakers Delight's company-owned stores in Victoria, covering between 140 and 150 staff.

The company is owned by co-founders Roger and Lesley Gillespie who in 2015 had an estimated shared personal fortune of about $150 million according to the BRW Rich List. 

Under Australian law, workplace agreements must meet a test that ensures all staff are "better off overall" than they would be under the award, the basic wages safety net. But the Bakers Delight Victorian agreement was struck during the Howard government's controversial WorkChoices regime that largely eroded this safeguard, until its repeal in 2009.

Agreements struck during this period that are still operational today are often referred to as "zombie agreements" – after former prime minister Tony Abbott famously declared WorkChoices was "dead, buried and cremated".

Other notable companies that held on to low-paying WorkChoices agreements, including the Pancake Parlour and burger chain Grill'd, have been forced to terminate these deals in recent years.

Initial win

Lawyers for Bakers Delight last month succeeded in thwarting the young worker's initial bid to terminate the old agreement by arguing she had put in her resignation just prior to filing the application with the Fair Work Commission.

An appeal will be heard before the commission's full bench on February 20.

"They are doing everything they can to avoid this application, but I'm someone's dad, and I'm doing this for every other Bakers Delight employee and their parents," said Mr Marsh, who will represent his daughter at the hearing.

"It's the principle. And this is just exploitation."

Bakers Delight general manager Gerry Gerrard said the company believed the agreement was fair.

"Our agreements are there, they're legal and until such time as there is a trigger, we would have no reason to change those agreements," he said.

"Whilst wages are one element of any agreement, and obviously a key issue, it's also about flexibility – people want to be able to work when they are able to work."

Flexibility advantage

Mr Gerrard said Bakers Delight's 2006 agreement offered non-monetary benefits and "flexibilities" that help make up for the lower overall pay.   

"A number of the younger kids, for example, want to work on Fridays, Saturdays and Sundays," he said. "The flexibility around the workplace agreement not only suits our business but also suits the individual."

Josh Cullinan, secretary of the newly formed Retail and Fast Food Workers Union, said Bakers Delight's outdated Victorian agreement was yet another "shocking" example of large-scale deals that have left hundreds of thousands of workers underpaid, saving big businesses millions every year.

Three of Australia's biggest employers – McDonald's, Coles and Woolworths – pay significant numbers of workers less than the award, mostly through reduced or absent weekend penalty rates, it has been revealed.

"Bakers Delight's Victorian agreement is simple wage theft, it's abominable, and this is from a company that almost exclusively uses young women from 14 to 18 years of age," Mr Cullinan said.

"We are looking at starting to organise these young women, and we are hopeful of launching a campaign in the next few months."

Workers at Bakers Delight stores across the country with more recent agreements are paid slightly higher base rates or penalties than staff at company-owned Victorian outlets.

Mr Gerrard said if the company was ultimately ordered by the Fair Work Commission to terminate the 2006 agreement, it would move staff onto an existing 2014 deal instead, which contains higher rates of pay.

"We would not prevent anybody or discourage anybody to make an application to Fair Work [to terminate]," he said. "It's their entitlement to do so."

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