Hundreds of Bakers Delight workers will receive large pay rises from Thursday, after the national bakery chain succumbed to pressure to dump an outdated wage deal and lift weekend penalty rates.
The move comes just weeks after Fairfax Media revealed the company has continued to use the WorkChoices-era agreement, struck in 2006, which allows it to pay 200 staff flat rates as little as $8 an hour.
An analysis of pay slips and rosters found many sales staff at Bakers Delight's company-run stores in Victoria and Queensland have been missing out on penalty rates and overtime pay, meaning they are often paid less than the award, the basic wages safety net.
Bakers Delight this week announced its decision to scrap the 2006 agreement covering its company-run operations in Victoria and some stores in Queensland, saying those workers would be moved onto the higher-paying General Retail Industry Award rates instead.
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Parent challenges Bakers Delight pay
Brad Marsh is taking Bakers Delight to the Fair Work Commission after discovering his daughter's pay rate.
Also this week, the bakery chain is facing a fresh challenge to another agreement that allegedly underpays up to 400 staff across 16 franchise stores in Victoria.
The 2006 agreement restricts penalty rates for staff working nights, Saturdays and Sundays. On Sundays the Bakers Delight agreement restricts penalty rates to just 10 per cent compared to double time under the award.
"Bakers Delight acknowledges the existing Collective Agreement has been in place for several years and the employment landscape has shifted since 2006, with the introduction of modern awards," it said.
"In light of this, we are applying to the Fair Work Commission to legally end the operation of the existing collective agreement. We are communicating closely with our employees about this process."
An investigation by Fairfax Media last year revealed that several fast food outlets and supermarkets were using agreements that would, if challenged, not pass the better off overall test.
The better off overall test means that all agreements have to ensure that all staff members covered by the agreement are not worse off than they would be if they were paid under the award.
On Tuesday, the Retail and Fast Food Workers Union applied on behalf of its members to the Fair Work Commission to terminate another expired agreement used by the company that was struck in 2011.
That agreement covers about 400 staff across 16 stores in Victoria.
Analysis by the union shows more than 80 per cent of retail staff are losing on average almost $1000 per annum – with some being paid more than $2000 less each year than the minimum wages in the General Retail Industry Award 2010.
According to the union, all but one of the sales assistants are below 21 and more than half are under 18 years of age.
"This case and the ones that follow will return millions of dollars to our members," Retail and Fast Food Workers Union secretary Josh Cullinan said.
Bakers Delight general manager Gerry Gerrard said the company would wait for the FWC decision on the union's challenge to its 2011 agreement before making any changes.
Mr Gerrard said the agreement "is a legal and valid agreement and in accordance to the laws of Australia and the state, Bakers Delight will always comply with those laws".
Young Workers Centre co-ordinator Keelia Fitzpatrick said Bakers Delight's head office had an "obligation to understand what agreements its franchisees are using".
"Head office needs to take some responsibility to ensure bakery workers at franchise and company stores are getting paid fairly and legally," she said.
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