Black Star Pastry workers sacked after wearing keffiyehs at Melbourne bakery reach settlement with former employer

<span>A joint statement announcing the settlement on Black Star’s website said the parties had worked together to resolve the matters.</span><span>Photograph: Morteza Nikoubazl/REUTERS</span>
A joint statement announcing the settlement on Black Star’s website said the parties had worked together to resolve the matters.Photograph: Morteza Nikoubazl/REUTERS

Two employees who were sacked after wearing keffiyehs to work at a bakery in Melbourne’s Chadstone shopping centre have reached a confidential settlement with their former employer.

Baristas Ella and Lucy were fired from Black Star Pastry, known for its Instagram-famous watermelon cake, after they wore keffiyehs – traditional scarves linked to the struggle for a Palestinian state – during a shift at the store on 30 January. The pair, both aged 22, launched legal action in March, alleging their termination was discriminatory and breached Victoria’s Equal Opportunity Act.

Related: Melbourne Black Star Pastry employees sacked after wearing the keffiyeh at work

A joint statement published on Black Star’s website said the parties had worked to resolve the matters after meeting privately to discuss the proceeding.

“Black Star understands that Ella and Lucy feel passionately about the cause they were representing,” the statement said.

“Black Star reiterates that it takes no issue with employees expressing personal views when not representing the business.”

“All persons agree that this is a sensitive and emotional global issue for many people, which is also impacting Australians in many ways.”

It said the parties were grateful to have achieved a resolution.

Ella and Lucy, who previously requested their surnames not be published, wore the keffiyehs to work to support National Keffiyeh Week.

The same day, the company’s HR department ordered them to remove the keffiyehs – an order they complied with. The following day, they were informed their employment would be terminated immediately.

Kelly Thomas, principal solicitor at the Young Workers Centre who represented the pair, said the organisation was “thrilled to successfully resolve this discrimination case without a formal hearing”.

“Ella and Lucy demonstrated peaceful solidarity with Palestine, which resulted in them losing their livelihood,” she said in a statement.

“Workers must be front and centre of businesses. Their interests outweigh all others.”

Related: Victorian parliament deems keffiyeh ‘political’ as it bans MPs from wearing it

Ella and Lucy argued the dismissal breached Victoria’s equal opportunity legislation for loss of employment because it discriminated against two staff members on the basis of their political belief or activity. The case was lodged with the Victorian Civil and Administrative Tribunal in March.

The termination letter, seen by Guardian Australia, said wearing a keffiyeh while working was “divisive and inflammatory” for the store’s customers and staff and against its “vision to create a place of inclusivity”. It said the conduct could bring “Black Star Pastry into disrepute”.

The letter said the pair had breached its code of conduct, uniform and presentation standards, and social media and communications policies.

Thomas previously told Guardian Australia that Lucy and Ella had not breached Black Star’s uniform policy.