Calombaris catastrophe - lessons for employers
Photo: The Age
By now, employers will have heard what has happened with George Calombaris’ Made Group, and the almost $8 million in back payments made to staff, not to mention the $200,000 fine.
In addition, Made Group has undertaken to comply with a stringent reporting and compliance regime that is subject to audit (at Made Group’s expense) over the next three years.
It’s also possible that Calombaris will lose his spot on MasterChef with an online petition doing the rounds demanding his removal from the hit show.
It is clear that businesses will want to avoid the financial and PR nightmare of a similar situation. So, what are the lessons that employers can take from this debacle?
Stay on top of penalty rates. This means overtime, Saturday / Sunday rates, and public holiday rates. Many of the underpayments in the Calombaris matter stemmed from a failure to properly pay penalty rates.
Make sure your annualised salaries are sufficient to offset any award entitlements – do the calculations, don’t just rely on the fact that you are paying over the award.
Make sure your payroll and HR staff properly understand how the Fair Work Act and Modern Awards apply to your employees.
Don’t just set and forget (like using template contracts) – regular reviews of your payroll and employment arrangements can nip problems in the bud and stop things from snowballing.
It’s not just hospitality businesses – last week it was revealed that jewellery chain Michael Hill had underpaid its employees to the tune of $25 million.
Getting it right can be difficult (clearly even for big companies) and working out how the Fair Work Act and modern awards work can be complex. Small and medium size businesses might feel as though they have no hope, but it’s clear that employers can’t just put it in the too hard basket – being on top of employee entitlements is part and parcel of running a business.
If you’ve got questions, get in touch for a chat about how we can help you keep your business compliant while you keep your business running.
18 July 2019
James Francis, Partner