Opinion
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Celebrity chef George Calombaris, the face of Masterchef Australia, is a disgraced figure after his hospitality empire was found to have underpaid staff of its flagship restaurants by nearly $8 million.
Calombaris founded his empire, MAdE Hospitality, in 2008 and operated several well-known eateries under its namesake, including the Melbourne-based Press Club, Gazi and Hellenic Republic.
An investigation by Fair Work Ombudsman inspectors found MAdE underpaid more than 500 of its staff between 2011 and 2017 to the tune of about $7.8 million in wages and superannuation, in breach of the modern award. The MAdE group has since entered into a court-enforceable undertaking with the ombudsman, whereby it has agreed to back-pay the wages it owes, make a "contrition payment" of $200,000 to the federal government and publish written apologies. Under this agreement, Calombaris must also take part in several "speaking engagements" to promote compliance with workplace laws.
Calombaris's underpayment scandal coincides with a series of notable "wage-theft" cases that came to light this year.
In June, the Federal Circuit Court found the owners of a sushi chain called "Tokyo Sushi" in NSW had underpaid more than 30 of their staff. Tokyo Sushi's underpayments totalled about $70,000 and involved underpayments of casual rates, penalty rates for weekends and public holidays, and minimum weekday rates.
The court came down hard, imposing a personal fine of more than $60,000 on the owner of the chain, and fines of more than $150,000 on each of the two controlling companies.
However, underpayment of wages is not confined to the hospitality and services industry.
Earlier this year, the ABC admitted to underpaying more than 2500 employees over the last six years.
From my experience, the public service is not immune to wage-underpayment claims.
Before that, Caltex had begun to pay nearly $6 million to staff to compensate for underpayments after the Fair Work Ombudsman found almost 76 per cent of 25 audited sites were in breach of workplace laws.
Last month, well-known jewellery retailer Michael Hill announced it would set aside up to $25 million to back-pay staff after admitting it had underpaid them due to errors in applying the retail award.
It's tempting to cry "wage theft" (and, in some cases, it may be deliberate), but it's likely that many underpayments happen by mistake. Ensuring that employees are paid the amount to which they are entitled isn't easy. If you've read an enterprise agreement or modern award, you'll be familiar with the complex, and often contradictory, rules that can be in place to calculate wages.
Understandably, many small businesses struggle to comply with the differing requirements of various workplace instruments (contracts of employment, workplace policies, modern awards or enterprise agreements, the Fair Work Act, etc), but we expect big businesses to get it right.
And if there's an expectation that big businesses should get it right, then that expectation is doubled when it comes to the Australian Public Service.
It's easy to assume that the reason a large-scale APS underpayment, with a matching public scandal, hasn't come to light is because no such scandal exists. Possible reasons for this could be that the public service is more cautious than (and not as profit-driven as) big business, and because it has the resources to comply with its complex wage obligations.
From my experience, the APS is not immune to wage-underpayment claims. Indeed, I frequently act for underpaid public servants.
Why is it, you might ask, that we never read about these cases in the newspaper?
First, the APS is generally willing to correct any clear errors in wage payments, preventing the matter from progressing any further.
Second, when it's arguable as to whether there has been an underpayment, the APS is strongly motivated to settle (i.e. pay the employee some of the alleged underpayment in exchange for them not taking the matter to court) in order to avoid a Colombaris-like scandal or a chain reaction of co-workers discovering that they, too, were underpaid.
But while the Commonwealth has kept most underpayment disputes out of the public sphere, a couple have reared their heads. In April, the Department of Home Affairs was accused of underpaying a staff member who claimed entitlement to a higher-duties allowance. The Community and Public Sector Union lodged an application to the Fair Work Commission on the employee's behalf, claiming the department failed to fulfil its obligations to pay at the higher level after the employee had worked at that level for more than 10 days. This matter didn't progress, however, as the department promptly paid the employee, ending the union's hopes for a "test case" hearing.
What should you do if you are concerned that you have been underpaid?
The first step is to confirm that your calculations are correct. If the department can make mistakes, so can you.
After this, you should speak to human resources and use any internal opportunities to escalate the issue. Failing resolution, you may need to commence action for breach of contract or contravention of enterprise agreement, depending on your circumstances. This can be daunting for many unrepresented litigants, and it may be worth seeking legal help at this point.
Remember, if you sign a deed of release as part of any settlement, you will likely be barred from litigating any other concerns you may have with your employer to the date of signing the deed - so make sure there aren't any other hidden underpayments.
- John Wilson is the managing legal director of BAL Lawyers and an accredited specialist in industrial relations and employment law. He thanks Maxine Viertmann and Rebecca Richardson for their help preparing this article. john.wilson@ballawyers.com.au