$120,000 fine for Darrell Lea

Posted by Daniel Palmer on 16th June 2008

Australia’s largest privately-owned confectionery manufacturer and retailer – Darrell Lea – has been fined $120,000 in the Federal Magistrate’s Court in Melbourne for breaches of the Workplace Relations Act.The Workplace Ombudsman – which initiated action against the company over its treatment of casual sales assistants, some as young as 16 – welcomed the penalty.

Federal Magistrate Philip Burchardt handed down a $10,000 penalty against the family-owned company for each of 12 instances of duress against employees it wanted to sign Australian Workplace Agreements (AWAs) early last year.

Legal action against Darrell Lea was initiated following investigations by the Workplace Ombudsman into allegations of duress from 12 casual sales assistants in three states.

Magistrate Burchardt found that a $120,000 penalty was “appropriate” given the company’s conduct had “led to a series of pressures being placed upon a disadvantaged group”, notwithstanding it was the first offence in its 80-year history. “The fact is that this was a big company that should have done better,” he said in a 12-page judgement. “Some casual sales assistants were subjected to pressure to sign the AWA quickly … some were told, or given the impression, that if they did not sign they would no longer be rostered to perform shifts on weekends or holidays… A number were deprived shifts they would otherwise have been rostered to because they would not sign…”

Magistrate Burchardt found that Darrell Lea had a responsibility to get competent advice about the introduction of AWAs, but failed to do so. “Darrell Lea failed to take appropriate steps to monitor the introduction of AWAs, and as a result, store managers put undue pressure upon casual employees to sign them,” he said. “A number were very young, and as casual employees, were disadvantaged in terms of any negotiating position.”

“The actions of Darrell Lea cost poorly-paid employees amounts of money which, whilst small in themselves, were doubtless significant to the workers.”

Magistrate Burchardt found that the net effect of the proposed AWA the company sought to introduce was that it had no payments for penalty rates for hours worked on weekends or holidays.

Ombudsman Nicholas Wilson says the fine sends a strong message to both Darrell Lea and other employers that bullying workers will not be tolerated and those who are caught will pay a high price.”Although we see many workplace agreements that have been properly framed, on this occasion, the company clearly acted without thinking and has now suffered the consequences,” he concluded.