Ombudsman rules over 3,000 employees affected
Cosmetics company Lush has admitted to underpaying its Australian workers by more than $4 million over nearly a decade, according to a report by The Guardian.
The cosmetics firm’s Australian arm underpaid 3,130 employees between 2010 and 2018 and breached three awards due to inadequate workplace processes, The Guardian reported. The Fair Work Ombudsman found that Lush Australia underpaid employees by $4.4 million, including interest and superannuation. The company – which referred itself to the ombudsman after its own internal investigation – has agreed to pay back the money and make a $60,000 contrition payment, The Guardian reported.
The Fair Work Ombudsman said that Lush Australia had “failed to provide its employees with a range of entitlements they were owed.” Underpaid employees included retail staff in Lush’s stores, management, and manufacturing workers in the company’s Sydney factory. The ombudsman also said the company breached minimum wage rates under three awards, The Guardian said.
“The contraventions were caused by Lush’s inadequate workplace relations systems and processes, including a lack of training for staff and managers, a manual payroll system, and the absence of a HR department in a rapidly growing business,” the ombudsman said. The ombudsman added that record-keeping laws were also breached.
Godfrey Moase, an executive director with the United Workers Union, told The Guardian that the underpayments reflect “a culture where labour rights are not prioritised.”
“It is not complex to comply with these awards,” Moase said. “It is not complex to comply with Australian minimum standards.”
Moase also expressed disdain for Lush’s contrition payment.
“For any sizeable business, a contrition payment of $60,000 is a rounding error,” he told The Guardian.
A spokeswoman for Lush Australia told the publication that the company had invested in new payroll systems to ensure the underpayments would not happen again.
“We hold our values dear and would never knowingly underpay, cheat or avoid our responsibilities and we regret that these mistakes and oversights happened,” the spokeswoman said. “We know this has been a difficult experience for all those concerned and we would therefore like to take this opportunity to publicly thank our staff for their patience and understanding whilst the long process of wage recalculation took place.”
