A Muffin Break franchise charged with hundreds of child labour law contraventions after hiring three underage children has shut down after being unable to repay COVID-related debts.
Rianshi Pty Ltd faced millions of dollars in fines after being charged by the Wage Inspectorate with 360 offences related to breaches of child employment laws.
Between March and October last year the company, operated by a husband and wife, hired three 14-year-olds without having work permits for them.
The children had all approached the store looking for work, the company's barrister Cassie Serpell told Melbourne Magistrates Court on Monday.
While that didn't excuse their wrongdoing, this wasn't a case where they had actively sought out underage employees, she said.
On 111 occasions over seven months, the children worked shifts at the Muffin Break store without child labour permits, and on each of those occasions they were not supervised by someone with a Working with Children Clearance.
On 70 occasions the children worked longer than three hours without being given their required 30-minute breaks, and they were employed for longer shifts than allowed on 69 occasions.
Children aged 14, who are legally employed under permits or licences, can only work three hours a day or 12 hours a week during school terms, or six hours a day or 30 hours a week in school holidays.
Serpell said the couple were simply not aware of the laws for hiring children under the age of 15 and while that didn't excuse their behaviour, it did explain it.
The Wage Inspectorate had been provided with an undated letter from the father of one of the children, giving permission for his child to work there, she said.
Though that didn't meet the legal requirements it was further context to the offending, Serpell said.
"They are both incredibly remorseful that they didn't know better," she said.
"They realise they should have got legal advice of that nature prior to starting the business."
Magistrate Malcolm Thomas acknowledged the couple were two small business owners, and not a large corporation with access to a human resources department.
But he accepted that because the laws were specifically designed to protect children from harm it was important to hand down a penalty that deterred others from breaking the law.
He convicted and fined Rianshi Pty Ltd $10,000.
The couple bought the franchise in May 2017 for $330,000 but after struggling financially since the COVID-19 pandemic they closed down the operation on Tuesday last week.
The court heard they had suffered health and sleeping difficulties as a result, were frequently stressed and depressed, and had fallen into debt with Muffin Break and Southland mall management - owing $171,000 in back rent.
Serpell also noted that changes had been made to child employment laws in July this year to simplify the process for employers.
Rather than the one permit per child employee system that existed at the time of their offending, the law now requires a single licence to cover the employment of multiple children.
Serpell told the court that in her extensive experience in industrial relations law, this was not an area that was well understood by businesses.
