Employees of enormously popular Brisbane doughnut chain Doughnut Time are taking the company to Fair Work over unpaid wages.
As many as 35 workers across the company’s 15 Australian stores allege they’re owed more than $70,000 in pay, the Courier Mail reports.
It’s the latest in a series of blows for Doughnut Time owner Damian Griffiths, who lost control of Alfred & Constance and Limes Hotel in late December; and whose Bubbles Bar and Bistro company went into liquidation at the start of this month, after it earlier sold Les Bubbles the restaurant as a going concern to Doughnut Time CEO and Managing Director Dan Strachotta.
The Doughnut Time staff claim the money is owed on unpaid shifts with some employees missing up to three weeks of pay. Former Doughnut Time chef Kimmy Mi Kim told the Courier the company first began defaulting on pay last September, with delays or more than four weeks for some staff. Wages have since been paid sporadically.
Kim was among several staff members from Brisbane, Melbourne and Sydney who left the business at the end of January, after having not been paid since January 7.
A group of Brisbane workers confronted management about the situation and were told they would be paid in time, although the company couldn’t set a firm date. When a January 13 deadline passed without payment they reported the issue to Fair Work, despite a company accountant telling one worker that its cashflow situation would soon improve.
Doughnut Time has expanded rapidly since first opening in Brisbane in 2015 and at one stage had more than 30 stores in Australia and the UK employing over 400 people. A press release sent to Broadsheet blames Doughnut Time’s financial woes on a challenging retail business environment, high rents and high labour costs, and the absence of outside capital.
Strachotta is now set to purchase Doughnut Time for an undisclosed sum from Griffiths, with the sale to be finalised mid-March. Strachotta, a turnaround specialist with experience working with start-ups and growth businesses throughout Australia Europe and Asia, was originally hired by Doughnut Time ten months ago as a consultant.
Part of the sale includes rectifying back pays of staff, which the release says are currently being worked through.
“It is very difficult for me to let go of a brand that I created only three years ago that has captured the hearts of Australians,” Griffiths said in the press release. “It would have been such a shame for it not to continue in any shape or form as there is still so much love for the brand out there. I am happy that the fans can still enjoy what we have created thanks to Dan, who I have every confidence will be able to turn it around despite the tough retail environment.”
In the meantime Doughnut Time is continuing with its expansion into the UK, with further openings planned for Dubai and Los Angeles.
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