The George Calombaris affair- a timely warning to employers and employees alike
The recent George Calombaris saga that has played out before the eyes of an eager media, has provided insight into the severity of underpayments within the hospitality industry. Unfortunately however, such conduct is not exclusive to the hospitality industry, and is commonplace throughout many Australian workplaces. The Fair Work Ombudsman (FWO) completed an investigation into Mr Calombaris’ MAdE Establishment Pty Ltd group of companies after a self-disclosure of underpayments at its Gazi, Hellenic Republic and Press Club restaurants in Melbourne. The FWO concluded that the initial estimates of underpayments fell well short of what employees were actually paid, concluding that between 2011 and 2017, 515 employees were underpaid more than $7.83 million.
In addition to the requirement to back pay affected employees, MAdE will be forced to pay a $200,000 ‘contrition payment’ to the Commonwealth Government’s Consolidated Revenue Fund. Unable to escape the reach of the FWO, Mr Calombaris has also been issued with an enforceable undertaking to complete seven public speaking engagements to educate the restaurant industry in relation to workplace law compliance.
Although the bad press, the enormous back payment bill and the FWO’s penalties do serve as a warning to all employers to ensure that their workplaces are compliant, others have called the penalties nothing more than a slap on the wrist. However, what remains clear to see, is that the media coverage of such an event will only serve to pique the interests of both employees and employers and will leave many asking whether their workplace entitlements are sufficient. No employer can escape their obligations according the FWO, including small and micro businesses. Just last month, the FWO fined a small business more than $380,000 for underpayments totaling around $70,000.
If you are an employer concerned about your workplace compliance, or alternatively an employee questioning whether you are being paid what you are owed, we encourage you to contact us or email us.
Date: July 2019