Donut King franchisee receives $60,000 fine for pressuring workers

Posted by Editorial on 9th July 2009

The operators of a Donut King store in Tasmania have been penalised almost $60,000 after admitting they pressured nine teenage workers to sign workplace agreements that reduced their penalty rates.Primrose Development Company Pty Ltd was fined $53,601.25 and company director and part-owner Judith Ann Simmonds, of Bellerive, was fined $6398.75 in the Federal Magistrates Court. Primrose has now paid $2490 compensation to the teenage workers. The company also admitted breaching workplace law by failing to follow the correct procedures when lodging AWAs for staff in 2007.

The fines and compensation are the result of a prosecution launched by the Fair Work Ombudsman.

Federal Magistrate John O’Sullivan delivered his judgment in Melbourne on Tuesday after the company admitted to duress and breaches of freedom-of-association. He found that “there is a need for general deterrence to mark the disapproval of the conduct in question and to act as a warning to others not to engage in similar conduct.”

The nine staff – aged 15 to 19 – were employed by Primrose as sales assistants on a casual basis at Donut King stores in the Cat & Fiddle Arcade, Hobart and Channel Court, Kingston and regularly worked hours which attracted penalty rates.

Primrose still owns the Hobart store but not Kingston.

Ms Simmonds admitted in court that in March, 2007 she presented staff at both stores with AWAs which provided a flat hourly rate of pay with no penalty rates and told them there was no room for negotiation. She said that any staff questions were met with the response that employees who did not sign would not get any shifts.

The court heard that all but one of the nine teenagers signed the AWA as a result of Simmonds’ comments and all nine – including the teenager who did not sign – had their pay rates changed to those stipulated in the AWA.

A complaint made by a 16-year-old girl from the Kingston store in May, 2008 prompted the Fair Work Ombudsman’s investigation.

Fair Work Ombudsman Executive Director Michael Campbell said the case sent a strong message to employers.

“Workplace bargaining must be completely free of coercion and duress,” he advised.