Menswear retailer Matt Jensen has joined calls for an overhaul of the general retail industry award after his company, MJ Bale, found it had been underpaying staff for several years.
MJ Bale, which employs more than 300 staff across almost 60 stores and counts veteran retailer David Briskin and former Oroton boss Ross Lane as directors, has handed back about half a million dollars in wages, interest and superannuation to compensate staff underpaid under the award.
MJ Bale’s casual and full-time staff were first notified a year ago of underpayments, including not being paid the right annual leave loading.
Staff received another email earlier this month informing them of underpayments for overtime and higher duties, such as opening and closing stores.
MJ Bale joins a growing list of high-profile retailers found to have been underpaying staff under the award or under enterprise agreements.
Earlier this month jewellery retailer Michael Hill flagged a $10 million to $25 million hit to profits after it found it had been misapplying the retail award for six years.
Super Retail Group, the owner of Supercheap Auto, BCF, Rebel Sport and Macpac, uncovered similar underpayments earlier this year and booked $43 million in compensation, interest and payroll tax as provisions and one-off costs in its first-half results.
A year ago beauty products retailer Lush admitted 5000 retail and manufacturing workers had been underpaid and blamed problems in its payroll systems.
‘The legislation is complex’
Several other major retailers, including The Apparel Group, which owns Sportscraft, SABA and JAG, are also understood to have called in auditors to investigate underpayments.
Mr Jensen, MJ Bale’s founder and chief executive, said the underpayments were inadvertent and reflected the complex nature of the award.
“We’ve worked hard to resolve it with our staff and make sure everybody has been made good – staff are the number one asset for our company,” Mr Jensen told The Australian Financial Review.
“The legislation is complex and there are points around higher duties and overtime that are quite complex to keep track of,” he said, citing the fact that casual staff asked to open or close a store are entitled to higher rates of pay.
“Some of these amounts are very small – you might be paying someone $7 extra on that day – and it’s very easy to [make a mistake] if payroll has not been informed that [the employee] was closing the store,” he said.
“There are plenty of retailers out there who are going through the same process – it’s keeping the accounting firms pretty busy at the moment … and it would be great to see some simplification to ensure it’s understood by everybody, employees and employers,” Mr Jensen said.
‘Probably needs a complete review’
The latest underpayments were revealed as Prime Minister Scott Morrison put employers on notice that those who exploited workers faced criminal penalties.
“Right now, the Attorney-General is drafting laws to deal with criminalising worker exploitation,” Mr Morrison told question time on Wednesday.
Australian Retailers Association chief executive Russell Zimmerman said the general retail industry award needed to be simplified but whenever the issue was raised employers were accused of attempting to undermine terms and benefits.
“We need to make it a long way less complex,” Mr Zimmerman said, citing six levels of employees, varying rates of pay according to age, overtime, penalty rates, higher duties rates and annual leave loading.
“Some issues may be resolved by having no individual wage rates for various ages – that would help simplify it – but it probably needs a complete review,” he said.
“This is not an excuse for underpayment but if an organisation the size of Super Retail Group have had problems in understanding the award or their enterprise agreement, how difficult is it for small retailers that don’t have a lot of back-up support to ensure they’re not underpaying.”