How Grill'd Underpaid Workers Through Traineeships: Technical Breakdown
If your traineeship does not involve genuine training, the trainee rate is not legally available. Using traineeships as a wage reduction mechanism is a compliance breach -- and under the new laws, potentially a criminal one.
Grill'd did not accidentally underpay its workers. The burger chain built a business model around government-subsidised traineeships that allowed it to pay staff up to 30% below minimum award rates -- while receiving taxpayer subsidies for doing so. When combined with an enterprise agreement that stripped penalty rates, the result was a systematic underpayment that affected thousands of workers, triggered Australia's first-ever fast food strike, and led to a class action on behalf of 15,000 current and former employees.
What Happened
Grill'd operates over 150 burger restaurants across Australia, employing approximately 4,000 workers at any given time. The company relied heavily on traineeships as its primary employment model, and negotiated an enterprise agreement with the SDA union that traded away penalty rates for minimal base pay increases.
The Traineeship Model
Grill'd placed the vast majority of its workers on Certificate III traineeships. Under Australian law, trainees can be paid a reduced rate on the basis that they spend a portion of their working time (typically 20%) receiving structured training.
The reality, according to worker surveys:
- 95% of surveyed staff received no training time during their traineeship
- Workers performed full productive duties from day one
- The "traineeship" existed on paper to justify below-award pay rates
- Grill'd received government subsidies (approximately $4,000 per trainee) for the nominal training
The Enterprise Agreement
Grill'd negotiated an enterprise agreement covering 4,000 workers that:
- Stripped all weekend and public holiday penalty rates
- Provided minimal base pay increases in exchange
- Left some workers paid $2,500+ per year less than the Fast Food Industry Award
- Amounted to more than 10% of many workers' annual wages
Timeline
- 2015-2019: Workers employed on traineeships at below-award rates
- 2019: Workers and unions publicly accused Grill'd of paying "rock-bottom" wages
- 2019: Fair Work Ombudsman confirmed Grill'd was under investigation
- 2020: Australia's "first-ever" fast food strike hit Grill'd stores
- 2021: Grill'd buckled under union pressure; new agreement included pay rises up to 13.5% and six months backpay
- 2023: Gordon Legal launched class action on behalf of 15,000+ employees alleging rest break violations
- Ongoing: Class action proceedings in Federal Court
The Numbers
| Metric | Detail |
|---|---|
| Workers on traineeships | Vast majority of ~4,000 workforce |
| Hourly rate for trainees | $14.50-$14.90/hour |
| Fast Food Award rate (comparable) | ~$18.73-$19.13/hour (at the time) |
| Annual shortfall per worker | $2,500+ |
| Enterprise agreement penalty rate | 0% (all penalties stripped) |
| Government subsidy per trainee | ~$4,000 |
| Class action scope | 15,000+ current and former employees |
| Award comparison | Fast Food Industry Award 2010 |
The Technical Failure
Grill'd workers were hit three ways: paid a trainee rate without genuine training, denied penalty rates through a non-compliant enterprise agreement, and denied rest breaks during shifts. Each layer compounded the underpayment.
The Grill'd case involves three interlocking compliance failures that, taken together, created a systematic mechanism for paying workers below award minimums.
1. Traineeship Misuse
The traineeship system exists to provide genuine vocational training. In exchange for the training investment, employers can pay a reduced rate. The legal requirements for a valid traineeship include:
- A registered training plan
- Structured training delivered during work hours (typically 20% of time)
- Progression through competency units
- Genuine skill development
At Grill'd, worker surveys found that 95% of staff received no training time. They were performing full productive duties -- making burgers, serving customers, cleaning -- from their first shift. The traineeship existed purely as a mechanism to pay below the Fast Food Industry Award minimum.
If a traineeship does not involve genuine training, the trainee rate is not legally available. The worker should be paid the full award rate for their classification level.
2. Enterprise Agreement That Failed the BOOT
The Grill'd enterprise agreement removed all weekend and public holiday penalty rates. Under the Fair Work Act, an enterprise agreement must leave every employee better off overall (the BOOT) compared to the applicable Modern Award -- in this case, the Fast Food Industry Award 2010.
The Fast Food Industry Award provides:
| Entitlement | Award Rate |
|---|---|
| Saturday penalty | 125% |
| Sunday penalty | 150% |
| Public holiday | 250% |
| Evening loading (10pm-midnight) | 115% |
| Late night (midnight-6am) | 130% |
The Grill'd enterprise agreement eliminated all of these. For a worker who regularly works weekends (which describes most fast food workers), the removal of penalty rates meant they were clearly worse off -- not better off -- compared to the award.
3. Rest Break Violations
The class action filed by Gordon Legal alleges that Grill'd did not provide workers with rest breaks they were entitled to under the enterprise agreement. In fast food, where shifts are often 4-8 hours, rest break entitlements are:
- 10-minute paid rest break for shifts over 4 hours
- 30-minute unpaid meal break for shifts over 5 hours
If breaks were not provided, each missed break represents both an underpayment (for unpaid working time) and a breach of working conditions.
The triple exploitation -- Grill'd workers were hit three ways: (1) paid a trainee rate without genuine training, (2) denied penalty rates through a non-compliant enterprise agreement, and (3) denied rest breaks during shifts. Each layer compounded the underpayment.
The Business Model Problem
The most troubling aspect of the Grill'd case is that the underpayment was not a bug -- it was a feature of the business model. The company structured its employment arrangements specifically to minimise labour costs:
- Traineeships to reduce base rates
- Government subsidies to offset training that did not occur
- An enterprise agreement to eliminate penalties
- A workforce of young, inexperienced workers unlikely to challenge their pay
This is the type of deliberate structuring that the 2025 criminal wage theft provisions were designed to address.
How It Could Have Been Detected Earlier
Continuously compare enterprise agreement terms against the applicable award for each employee based on their actual working pattern. Workers who regularly work weekends will immediately show as worse off under a penalty-rate-free agreement.
What Would Have Flagged the Problem
Traineeship validation: Automated monitoring of whether training plans are being delivered -- hours logged in training versus productive work. If 95% of trainees are not receiving training, the traineeship model is a sham.
BOOT comparison: Automated comparison of enterprise agreement terms against the applicable award for each employee based on their actual working pattern. Workers who regularly work weekends would immediately show as worse off under the enterprise agreement.
Penalty rate gap analysis: Comparing actual payments (with no penalties) against what the award would require (with penalties) for the hours and days actually worked.
Rest break compliance monitoring: Tracking whether mandated rest breaks are scheduled and taken, with alerts when breaks are missed.
Traineeship completion rate analysis: Monitoring what percentage of trainees actually complete their qualification. A low completion rate combined with a high traineeship rate suggests the program is not genuine.
How AirComply Prevents This
Award vs Agreement Comparison
AirComply compares what an employee actually receives under their enterprise agreement against what they would receive under the applicable Modern Award. This BOOT comparison runs continuously, not just at the time the agreement is approved. When working patterns change (more weekend shifts, more public holidays), the comparison updates automatically.
Penalty Rate Calculation
AirComply calculates the full penalty rate entitlement under the applicable award for every shift worked. Even when an enterprise agreement modifies or removes certain penalties, AirComply shows what the award would have paid -- making it immediately visible when an agreement leaves workers worse off.
Trainee Rate Validation
AirComply flags when trainee rates are being applied and can track whether the conditions for trainee rates (genuine training, registered training plan, structured training time) are being met. If trainee rates are applied without genuine training, the system alerts that the full award rate should apply instead.
Rest Break Monitoring
AirComply tracks rest break entitlements based on shift length and flags when breaks are not scheduled or not taken. This creates a compliance record for rest break obligations and identifies systemic patterns of missed breaks.
Monitor traineeship completion rates. A low completion rate combined with a high traineeship usage rate suggests the program is not genuine and the full award rate should apply.
Key Takeaways
When your business model depends on underpaying staff, it is not a viable business model -- it is a compliance time bomb. Every layer of Grill'd's model would have been flagged by automated compliance monitoring.
Traineeships are not a licence to underpay. If the traineeship does not involve genuine training, the trainee rate is not available. Using traineeships as a wage reduction mechanism is a compliance breach -- and under the new laws, potentially a criminal one.
Enterprise agreements can be worse than awards. The BOOT is supposed to prevent this, but the Grill'd case shows that agreements can be approved and operate for years while leaving workers worse off. Continuous monitoring is needed.
Young workers are disproportionately affected. Fast food employs primarily young, inexperienced workers who are least likely to know their rights or challenge their employer. Compliance systems must protect workers who cannot protect themselves.
The class action threat is real. 15,000 current and former employees in a class action. The potential liability for Grill'd is enormous -- and it stems from a business model that was designed to minimise labour costs at workers' expense.
The bottom line -- Grill'd built a business model on paying workers less than the award minimum through a combination of sham traineeships, penalty-rate-free enterprise agreements, and young workers who did not know better. Every layer of this model would have been flagged by automated compliance monitoring. When your business model depends on underpaying staff, it is not a viable business model -- it is a compliance time bomb.
AirComply compares enterprise agreements against Modern Awards automatically. Check your compliance now.