A Victorian branch of bakery franchise Muffin Break has been slapped with 360 criminal charges for alleged breaches of child labour laws. Here’s what HR needs to know about this case.

A branch of Muffin Break in one of Melbourne’s biggest shopping centres is facing criminal charges after the Wage Inspectorate Victoria alleged it had breached the state’s child labour laws on multiple occasions.

The store in question, based in Westfield Southland shopping centre, has been accused by the watchdog of employing three children under the age of 15 without a permit on 111 occasions between March and October 2022. 

The Inspectorate also found the store to be in contravention of the Child Employment Act 2003 by failing to ensure the children were supervised by someone with a valid Working with Children Clearance, failing to provide appropriate rest breaks and exceeding the maximum legal working hours for under-15s (three hours per day during a school term and six hours per day during school holidays). Each of these offences carries a maximum penalty of over $18,000.

This isn’t the first time Muffin Break has found itself in hot water. In 2019, a general manager at the company gave an interview in which she suggested that the younger generation (“millennials”) had an entitlement mentality, were overly sensitive and were unwilling to work hard. The interview quickly went viral and prompted widespread backlash, after which the company issued an apology.

This latest case involving Muffin Break marks the eighth child employment prosecution the Wage Inspectorate Victoria has initiated in the last 18 months.

According to Aaron Goonrey, Partner at Lander and Rogers, the breadth and complexity of Australia’s child employment laws means that franchises operating on a national level must be especially judicious in reviewing its legal obligations when it comes to hiring children.

“There are no uniform child labour laws in Australia. Each state will regulate it. And I think some people would find that surprising, given we are an advanced, developed nation,” he says.

“If you operate at a national level, there will be myriad different laws that regulate how you engage people who are under 18 years of age. There may be certain restrictions in some states in terms of the age group you can employ or requirements around, for example, Working with Children Checks.

“When you run a business [that employs children], regardless of how big the business is, you’ve got to do your research. If you can’t afford to get advice, then you just have to do really good research and make sure you’re dotting your I’s and crossing your T’s.”

The legal risks of employing children

Although employing children adds several layers of legal complexity to running a business, there are some employers that are more than willing to bear that risk for the financial payoff, says Goonrey. 

“When you look at the sectors that [tend to] employ children, including – but not limited to – retail, fast food and hospitality, employing children can be very, very lucrative when you do a cost-benefit analysis. 

“For small businesses, I can see breaches happening because they weren’t paying attention. But for a national franchise, I would have thought the master franchisor may have given some guidance to the different franchisees about employment laws generally.”

“Kids under 15 don’t always recognise risks in the workplace and some don’t feel able to speak up when they feel unsafe.” – Robert Hortle, Commissioner of the Wage Inspectorate Victoria

When HRM reached out to Muffin Break for comment, its parent company Foodco responded by affirming its commitment to providing this guidance to all its franchisees.

“Foodco takes any breaches of workplace employment practices very seriously and is currently investigating allegations regarding a Muffin Break outlet,” said a company spokesperson.

“Whilst we appreciate the franchisees are ultimately the employer of employees working at each franchised site, Foodco is committed to ensuring franchisees are aware and compliant with their workplace employment obligations, and we will continue to provide training and carry out audits to ensure franchisees fulfil their obligations.”

In order for employers of children to ensure they are aligned with the requirements of the relevant state laws, a dedicated process for staying compliant and up-to-date with legislation is essential, says Goonrey.

“If you’re a business that employs people who are under 18, you are going to have to look at how you engage children, how you get the [Working with Children] checks, how you check people are the age [they say they are], getting permission from the guardian or registering that you’re employing this person, and then build a system [around that],” he says.

“[In this case], the kids were being made to work near dangerous equipment – deep fryers, chopping machines and pizza ovens. If you’re engaging children, you would also need to make sure you have inducted them from a work health and safety perspective.”

When it comes to safety checks, he recommends a ‘better safe than sorry’ approach.

“For example, even if there isn’t a legal requirement to get a Working With Children check for all adults who are in the workplace with children, [think about] if it would be prudent from a work health and safety perspective to do that.”

Changes to child labour laws on the horizon

Last year, the Victorian government announced impending changes to child employment laws, which are due to take effect on 1 July this year. 

The headline change is the introduction of a child employment licensing system that will replace the existing permit system. Where an application is assessed and a licence is issued, employers will be able to employ multiple children under one licence, rather than applying for individual permits for every child they engage. 

According to Robert Hortle, Commissioner of the Wage Inspectorate Victoria, the new licensing system will be more streamlined and risk-based, allowing the Wage Inspectorate to focus on monitoring the types of work that carry the highest risk.

“Kids under 15 don’t always recognise risks in the workplace and some don’t feel able to speak up when they feel unsafe. The permit system helps ensure the employer understands the risks and puts measures in place to keep young staff safe,” says Hortle.

Cases like this may also start more conversations about the introduction of uniform child labour laws across Australia, says Goonrey.

“[Although] Australia is a signatory to certain international conventions in relation to the employment of or engagement of children, there’s no uniform Commonwealth law about child employment. [We] could see child welfare advocates saying we need something like that, particularly given the egregious nature of the breaches that we’re talking about by Muffin Break.”

This case was due to be heard in June 2023, but we have yet to hear of an outcome.

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