Taxpayer-funded $7m ‘hamburger uni’ paying $14.50 an hour
Hamburger chain Grill'd has received more than $7 million in taxpayer subsidies for an apprenticeship program that has been criticised as a deliberate scheme to underpay young staff.
The revelation comes as the workplace cop confirms it is looking into the healthy burger business, days after its founder Simon Crowe issued a panicked message to staff ahead of a "pending media story" about its training program.
Grill'd, which has previously come under fire for allegedly underpaying workers, requires new employees to undertake compulsory retail and hospitality training programs.
In exchange for being paid as little as $14.50 an hour - $1.50 less than the award wage - young workers receive a certificate through vocational education provider Sarina Russo.
For an 18-year-old school leaver, the gap between their wage as a trainee and a non-trainee widens as they get older - from $1.50 an hour starting out to $2.50 by the time they turn 20.
Grill'd has multiple outlets across NSW and Queensland, including a number of restaurants on the Sunshine Coast.
Critics, including one former staffer who completed the program, say the training is simply an excuse to legally pay young workers below award wages while receiving generous government handouts, a claim Grill'd "strongly" denies.
"(The training) was really, really easy - literally like four hours' work - (but) it took me almost two years to get it completed," one former Grill'd employee told news.com.au.
The young woman, who worked at the chain for nearly three years, said she was promised when she was hired the training would take "no more than a year, that it would be really quick".
She said Grill'd "didn't really talk about" how the traineeship would affect her wage.
"They just said when you finish you'll get an increase and you'll have a Cert III, and that you have to have it to work here," she said.
When she started working at Grill'd at the age of 18 she was on $14.50 an hour, which increased to $16 an hour, then $17 an hour before she finally moved off the traineeship onto a normal wage of about $19 an hour.
She claimed the training program was a stalling tactic to pay her less.
"It wasn't due to the amount of work, it was how they stalled," she said.
"I wasn't able to log onto the system, you would contact the regional guy, he wouldn't get back to you. There was a lot of blatant stalling from the company."
She said Grill'd would deliberately not roster employees onto the stations they needed to complete the training. "You'd have to do a certain amount of hours on different stations to be eligible to get ticked off," she said.
"A lot of the (training) was for the servery (kitchen). I was stuck on the floor for the first one-and-a-half years, never in the kitchen. There would always be excuses."
She added that if staff ever complained about this or other breaches of their contracts - such as working more than one late shift per week or more than two Sundays per month - their hours would simply be cut.
"I'd be working five nights a week and every Sunday. If you ever complained, they'll give you no shifts. You can't really say anything," she said.
She said she finally quit a few months ago for her mental health.
The mother of another former Grill'd worker told news.com.au her son quit after six months - but Grill'd still received a $6000 subsidy for employing him.
"I've worked in industrial relations and human resources for many years and I'm aware of traineeship systems," she said.
The mother said the scheme was 'corporate welfare'. "We called it Hamburger University. It's just outrageous. (They) put them on a traineeship, collect from the government and pay them $14.50 an hour."
The Sydney woman said her son, who went to work for Grill'd after finishing year 12, received barely any actual training and thought it was a "load of rubbish".
"He worked at McDonald's when he was at school and the training there was much, much better. The other thing that made him a little bit cranky was that they were also using the traineeship system to reduce wages. That was unfair, really. They all turned up and did their shifts."
She said her son was studying and never intended to make a career out of hospitality, making the "training" pointless.
"That whole question of traineeships for people who are at university - they're not going to make a career out of hospitality - really needs to be looked at by the government," she said.
"It's government money chucked around for no purpose."
In a statement, Grill'd denied its training program was a deliberate scheme to underpay workers.
"Grill'd's 2015 enterprise agreement applies to our restaurant teams and is approved by the Fair Work Commission," the spokeswoman said.
"Any suggestion that the enterprise agreement is anything but lawful, valid or compliant is strongly denied. The current agreement resulted from a consultation process with staff and was approved by 95 per cent of staff who voted.
"We are proud of our traineeship program; it has provided qualifications and a pathway for thousands of people who have gone on to bigger and better things, many in senior positions at Grill'd and across hospitality and other industries. Our traineeship program is accredited and administered by qualified external training providers and those completing it receive nationally recognised qualifications. It enhances the skills of trainees not just for Grill'd but for the trainee generally."
She said it was "not a condition of employment that team members become trainees, although we encourage our employees to complete the traineeship".
The spokeswoman said nearly all entry-level staff were required to do the traineeship before the 2015 agreement, but that now only 31 per cent of all staff were trainees.
"Traineeships remain the preferred point of entry into a career at Grill'd," she said.
She said trainees take 13 months to complete the traineeship, on average.
Training provider Sarina Russo was approached for comment, but referred questions back to Grill'd.
A Fair Work Ombudsman spokesman confirmed the watchdog was "conducting inquiries in relation to Grill'd".
"As these inquiries are ongoing, it is not appropriate for us to comment further," he said. "Any workers with concerns should contact us directly."
Official figures show Grill'd has received a total of $7,057,500 from the federal government's Apprenticeships Incentives Program since 2005-06.
In a statement, a Grill'd spokeswoman said the grants from the government were "more than offset by the significant investment made into the curriculum development, ensuring compliance, and additionally fees to our Registered Training Organisation partners".
"The net cost to Grill'd of running the traineeship program as it relates to government subsidies has averaged in excess of $450,000 each year over the last three years," she said.
"Grill'd appreciates the government's efforts in providing nationally accredited qualifications and promoting the professionalisation of the hospitality industry. This provides a pathway for young people to establish careers in either hospitality or other industries."
According to data from the Department of Employment, Skills, Small and Family Business, in 2019-20 Grill'd received $454,250, in 2018-19 it received $680,250 and in 2017-18 it received $835,500.
Those figures do not include franchisees.
As of the start of this month, 1528 apprentices and trainees were undertaking Hospitality Certificates II, III and IV and Retail Certificate III at Grill'd.
Employment Minister Michaelia Cash said in a statement the "underpayment of any worker will not be tolerated by the Morrison government" and that "workers with a complaint should contact the Fair Work Ombudsman for assistance".
"The Morrison Government is committed to ensuring that we have a vocational education and training system that delivers job-ready Australians with the right skills to employers," Ms Cash said.
"We are committed to training an additional 80,000 apprentices and trainees over the next five years. An apprenticeship or traineeship is a great way to get a head start in a chosen career by providing a nationally recognised qualification and delivers on-the-job experience, enabling students to earn while they learn.
"It is the responsibility of state and territory governments to approve employers to train apprentices and trainees."
From July 1, the Australian Apprenticeships Incentives Program will be replaced with a new, simplified and streamlined program called Incentives for Australian Apprenticeships.
The Grill'd spokeswoman said 72 per cent of respondents to a third party conducted anonymous survey of more than 2700 Grill'd staff undertaken in November 2019 "answered that they had 'access to the learning and development I need to do my job well'".
Last week, Mr Crowe sent an "urgent update" to staff to get ahead of criticisms of Grill'd's training program, which first came under scrutiny in 2015.
"Any suggestion that we have fallen short of our values is one that I take very seriously," Mr Crowe said in the email, which was posted to Twitter by University of Technology Sydney journalism student Alex Turner-Cohen.
"We are aware of a pending media story that will wrongly claim we have worked against the interests of our franchise partners, and our restaurant teams, including how we conduct our training."
"At Grill'd we are always seeking to improve our business systems and processes and we have worked hard to make Grill'd a place of work that people can enjoy, including improvements to the quality of Grill'd training."
In a statement to news.com.au last week, a Grill'd spokesman said the company was "immensely proud of the opportunities we have provided to many thousands of Australians" and "any suggestion we have fallen short of our high standards will be treated very seriously".
In 2015, Grill'd agreed to renegotiate its contracts after employee Kahlani Pyrah took the chain to court for allegedly underpaying staff at its Camberwell outlet.
At the time, Mr Crowe said in a video message that the 2005 WorkChoices-era agreements were "absolutely legal" but "there's enough noise out there to know people want that agreement modernised, and we will listen".