Lush Australia admits to underpaying staff
today Jul 18, 2018
The Australian subsidiary of British cosmetics brand Lush has apologised for accidentally underpaying its staff to the amount of AU$2 million (US$1.47 million), following "serious payroll system errors" made since 2010.
Known for its sustainable products and packaging, Lush Australia said it would effectively pay back the money it unknowingly owed to some 5000 retail and manufacturing workers over the past eight years.
“We would never knowingly under pay. This was not deliberate. It goes against everything we value and believe in, and we are so sorry to have let our staff down in this way,” said Peta Granger, director of Lush Australia, in a press release.
“This resulted from a very serious failure on our part to upgrade our internal systems. We should have had far more respect for our people’s pay and upgraded our payroll infrastructure to keep up with the growth of our business."
The errors started with Australia's introduction of 'modern awards' in 2010, those formed as part of the Fair Work Act, which serves as a basic wages safety net affecting most workers.
The pay discrepancy was first brought to Lush's attention in August via its 'support team', which led to a series of investigations that ran until December. From here, Lush embarked on a review of retail contracts, policies, rostering and salaries to determine the fault.
Lush said the overall investigation and calculation process will cost the company around $1.5 million to complete, on top of the expected $2 million back payment.
The news is a major blow to the ethical and transparent brand image upheld by Lush, which prides itself on fair trade practices and workers' rights.
Following the Lush scandal, the National Retail Association said on Tuesday that the 'modern award' system was complicated, and urged Australian retailers to seek support and advice to effectively navigate the legislation.
“We are calling on all businesses around Australia to perform a thorough check of your own payroll systems to make sure you are meeting your responsibilities," said NRA chief executive officer, Dominique Lamb.
Lush operates more than 30 stores in Australia.
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