The Fair Work Ombudsman ordered that MasterChef Australia’s judge and celebrity chef George Calombaris MAdE Establishment group of companies make a $200,000 contrition payment as a result of the underpayment of more than 500 current and former employees of $7.8 million in salary and superannuation.
In 2015, the Fair Work Ombudsman alerted MAdE Establishment Group, a privately held hospitality company founded by Calombaris in 2006, to a problem in their payroll system, which had resulted in the mis payment of a staff member. As a response to this incident, the CEO of Made Establishment, Troy McDonagh, commissioned an independent review to MAdE Establishment’s payroll systems.
Two years later, this review discovered several payment discrepancies, which had resulted in further staff being underpaid. The management voluntarily reimbursed underpaid staff members at the highest overtime rate paying on average $16,000 per employee. Calombaris said he was ‘devastated’ by the situation, and that correcting the underpayment was his ‘highest priority.
Calombaris mentioned that in 2017, MAdE Establishment found the problem, self-reported it and acknowledged they had made a terrible mistake and made sure they paid back everyone. He said the underpayment was an oversight and that his employees mean everything to them.
In 2017, Calombaris stated:
I take full responsibility for this. I’m sorry, I go back 13 years ago, you’re a young chef, 26 years of age, you want to open your first restaurant, you get together with three other partners at that point, and you open the first one, then the second one opens, the third one, the creativity is flying, the ideas are flying, the dreaming is there. But the sophistication in the back end wasn’t there. There was no CEO, there was no people culture manager, there was no elite finance team like we’ve got now, that can make sure that mistake that we made will never happen again.
The current situation
MAdE Establishment is in the news again, for the very same reasons. On July 2019 the Fair Work Ombudsman stated that MAdE Establishment had underpaid current and former employees $7.8 million in salary and superannuation. As punishment, a court-enforceable agreement asked Calombaris to pay a contrition payment of $200,000 and agree to engage external auditors until 2022 to check employee salary, superannuation and related issues. The celebrity chef was also asked to undertake speaking engagements to educate the restaurant industry on the importance of workplace compliance in the hospitality industry.
Fair Work Ombudsman’s Sandra Parker said, this will teach him a lesson and also set an example for other restaurateurs. She added, The court-enforceable undertaking commits MAdE Establishment to stringent measures to ensure that current and future employees across their restaurant group are paid correctly. Emphasising the importance of appropriate workplace compliance education, policies and systems she said: MAdE’s massive back-payment bill should serve as a warning to all employers that if they don’t get workplace compliance right from the beginning, they can spend years cleaning up the mess.
Workplace compliance goes beyond salary and superannuation
Workplace relations and safety programs include wages, superannuation and other basic entitlements for staff. It also includes other important matters such as safety, privacy, workplace gender and equality and human rights. As Calombaris rightly pointed out, the failure to invest in human resources and the absence of a reliable workplace compliance system to identify, report and resolve issues pertaining to payment and superannuation was a massive oversight. This is another reminder of how important it is to invest in the right people and processes.
Workplace compliance is not just for larger organisations
Sentrient helps small and medium businesses and larger organisations with a workplace compliance system and supporting education and training to help create safe, inclusive and respectful workplaces. Unlike legacy compliance systems, the Sentrient compliance solution is suitable for businesses with as few as five staff. Sentrient is at a fair price, is simple to implement, and easy to maintain. This makes it accessible to all businesses in Australia and removes the excuse of not having resources in place.
To find out about how Sentrient can save your business from significant claims of legal liability and reputational damage you can find out more here. Or you can contact us on 1300 040 589 or email firstname.lastname@example.org.