Viewing entries tagged
underpayment of employees

Overworked and Underpaid: The reality behind George Calombaris’ Greek tragedy

In a brilliant piece of spin worthy of an election campaign, George Calombaris openly admitted to underpaying past and present employees over $2.9 million – and has maintained his positive public image.

From the papers to The Project, the popular Masterchef appeared everywhere, apologised for profiting from his workers and continued to accept bookings at his numerous Greek restaurants across Melbourne.

You would be forgiven for thinking that it’s all that easy – underpay, apologise, back to business as usual – but be warned, this is the exception, not the rule. 

Businesses that are found to breach the Fair Work Act 2009 are liable to penalties of up to $54,000 for corporations, per breach. This means that if you underpay 100 employees, you are liable to 100 lots of penalties. Directors also face penalties of upon $10,800 per breach.  

Last year, the Fair Work Ombudsman recovered more than $2.2 million dollars in penalties alone for underpaid employees.

For George Calombaris’ Made Establishment empire, the repayments will be made quickly and easily, as the investors in the business have continued to pledge their financial support for the company.

Other businesses are not so lucky and have had to enter into voluntary administration after being ordered to back-pay their workers.

If you are unsure of how much to pay your employees in order to fulfil your obligations under the relevant employment contract, modern award or enterprise bargaining agreement, talk to someone who knows the answer! Contact the workplace relations team at Nevett Ford for all your employment law questions on (03) 9614 7111.

Not only the hair was short but the pay was too

A chain of Melbourne based hairdressing salons has been obliged to enter into an enforceable undertaking with the Fair Work Ombudsman to avoid prosecution after the agency uncovered widespread underpayment of employees.

In mid-2016 two former employees approached the FWO claiming that they had not been paid accrued annual leave on termination of employment.

One of the employees also alleged that penalty rates had not been paid for work on Sundays and public holidays.

The investigation the FWO conducted found that numerous employees had been underpaid a total of $88,000.00 over an eighteen month period.

The employer behind Best Cuts and Colours and What’s Up Hair agreed, as part of the enforceable undertaking, to write letters of apology to each of its underpaid employees and make a “contrition payment” to Monash Oakleigh Legal Service of $10,000.

Because the employer cooperated in the investigation the FWO thought that the best way of ensuring the underpaid employees received their correct pay was by having the employer enter the enforceable undertaking rather than prosecuting.

This case demonstrates the importance of employers knowing and complying with their obligations under a modern award.

If you are an employer who has had an inquiry from the FWO we have the lawyers who can advise you through the process.