Coming on the heels of several bakeries being fined for underpaying workers, Bakers Delight is now facing legal action from the Fair Work Ombudsman (FWO) for allegedly underpaying $1.25 million across three outlets in Hobart.

The FWO has alleged in the Federal Court of Australia that Bakers Delight franchisor, Bakers Delight Holdings, knew that 142 staff members across outlets in Kingston, Lindisfarne, and Eastlands in Tasmania were being underpaid by franchise owners. The underpaying of staff had been going on since 2017, the FWO contended.

“In this case, we allege Bakers Delight Holdings was aware many young workers at these three Hobart stores had been underpaid but failed to take reasonable steps to prevent further underpayments occurring,” Acting FWO Kristen Hannah told Australian Financial Review.

A majority of the staff being underpaid were young workers who worked across sales and baking roles.

The FWO has also commenced action against John and Lisa Puglisi, trading under Make Dough Enterprises, who managed the franchises where the alleged underpayment occurred.

The case against Bakers Delight Holdings and the Puglisis is that the latter failed to pay overtime or minimum wages as they were required to do, and that the former, as the franchisor, ought reasonably to have known what was going on in order to rectify it.

A Bakers Delight spokesperson disagreed with the FWO’s findings that it had been negligent, indicating that the company believed it had taken reasonable steps to prevent the contraventions, but it would co-operate fully with the FWO in its ongoing investigation against Make Dough Enterprises.

A directions hearing for the matter is scheduled for July 26.