Muffin Break franchisor back-pays $26,000 following compliance audit

By Nick Hall | 03 Sep 2019 View comments

Jamaica Blue and Muffin Break franchisor, Foodco has back-paid 166 employees a total of $26,562.30 following the completion of a two-year compliance agreement with the Fair Work Ombudsman (FWO).

The Proactive Compliance Deed was signed in 2017 and covered the franchisor’s more than 4000 workers Australia-wide.

The FWO invited Foodco to sign after concerns were raised over workplace law compliance cultures in major franchise groups, including the Jamaica Blue and Muffin Break franchisor. At the time, the FWO was actively involved with Foodco, engaging in enforceable undertakings with two Muffin Break franchise operators found to have underpaid workers.

Jamaica Blue and Muffin Break franchisor back-pay

Under the 2017 agreement, the workplace regulator committed Foodco to improve compliance with Australia’s workplace laws throughout its network. The Jamaica Blue and Muffin Break franchisor was also required to have an independent third party conduct an audit to ensure staff received current entitlements.

The audits identified a sum of 152 employees had been underpaid a total of $4244.75. Additionally, the FWO referred 12 requests for assistance from workers to Foodco, resulting in 14 employees being back-paid $22,317.55.

Sandra Parker, Fair Work Ombudsman said that the partnership with the Jamaica Blue and Muffin Break franchisor had strengthened working conditions across the board.

“Our key objective of this partnership was to ensure that Foodco established processes to identify and resolve workplace disputes efficiently across its network, and educate franchisees on their lawful obligations under the Fair Work Act,” Parker said.

The regulator revealed in addition to compliance reviews, Foodco had also conducted workplace law training for staff and franchisees. The training followed the establishment of an employment relations hotline for staff to raise concerns, and improved access to information on workplace laws across the business.

Food franchisors in the spotlight

The completion of Foodco’s compliance agreement comes at a pivotal time for the franchise sector. Just last week, the Australian Competition and Consumer Commission (ACCC) handed down a scathing review of the nation’s food franchisors.

The Disclosure practises in food franchising report revealed that one in three food franchisors had failed to consistently disclose useful contact details for former franchisees, in addition to a range of other issues.

Parker echoed the ACCC’s stance on franchisor compliance, inviting all operators to come forward with concerns, or to proactively seek advice.

“Franchisors are a priority sector for the Fair Work Ombudsman and we urge all head offices to prioritise compliance with workplace laws or they risk damage to their brand and employees,” she said.

“Under the Protecting Vulnerable Workers amendments to the Fair Work Act in 2017, franchisors are responsible for ensuring compliance throughout their service network.”