COVID-19: Donut King owner Retail Food Group to stand down or reduce hours of majority of staff

The company that owns Donut King, headquartered on the Gold Coast, will stand down or reduce working hours for a majority of staff as it faces an “extremely difficult” trading environment.

DONUT King owner Retail Food Group will stand down or reduce working hours for a majority of its staff as it deals with an “extremely difficult” trading environment.

The company made the announcement in a statement to the ASX this morning before the start of trade. Shares held steady today at 3.3 cents.

RFG said it was taking the measures to safeguard “as many jobs as possible over the longer term”.

The company said recent trading data supports its expectation of a “significant” decrease in customers which it said was felt “most acutely within those outlets situated in shopping centres”.

Retail Food Group has a number of franchise systems including Pizza Capers . (AAP Image/Dan Peled)

RETAIL FOOD GROUP SWINGS TO FIRST HALF-YEAR PROFIT SINCE 2017

“A large majority of our franchise partners are facing an extremely difficult trading environment, particularly within shopping centres, as consumers react to the increasingly onerous measures taken by government, and of course are focused on more immediate issues

such as their and their family’s health and safety,” executive chairman Peter George said.

“As a responsible franchisor it is necessary for us to take a long-term and pragmatic approach to best secure the future sustainability of our franchise network.”

RFG employs 500 staff directly, including workers in the US, while thousands more are employed by the franchisees although the exact number is unknown.

An RFG spokeswoman declined to state how many Gold Coast staff would be stood down or put on reduced hours.

The latest announcement comes after the company withdrew its guidance for FY20, which was expected to be between $42 million and $46 million in underlying pre-tax earnings.

The company said 200 outlets have “temporarily closed” internationally and a “handful” in Australia.

Retail Food Group executive chairman Peter George. Photo: Supplied

Mr George previously said he anticipates the company will need to provide additional financial support to franchises as the situation changes.

Attwood Marshall Lawyers commercial litigation lawyer Charles Lethbridge said the rights of employees “in a time like this” are limited.

“Under section 524 of the Fair Work Act 2009 (Cth), an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible,” he said.

“If an employer stands down an employee during a period such as this, then the employer is not required to make payments to the employee for that period.”

He said enterprise agreements or employment contracts may include additional employer obligations such as consultation or notice.