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Lush coughs up after eight years of underpayment

Popular international cosmetics company Lush has back paid more than $4 million to more than 3100 Australian employees after it was revealed staff had not been paid properly for eight years. The Australian arm of the multinational company has identified and back paid 3130 current and former employees $4.4 million, which includes interest and superannuation,…

Popular international cosmetics company Lush has back paid more than $4 million to more than 3100 Australian employees after it was revealed staff had not been paid properly for eight years.

The Australian arm of the multinational company has identified and back paid 3130 current and former employees $4.4 million, which includes interest and superannuation, for underpayments between 2010 and 2018. The company has also entered into an enforceable undertaking with the Fair Work Ombudsman.

Lush Australasia Retail Pty Ltd and Lush Australasia Manufacturing Pty Ltd self-reported to the regulator in 2018 that it had underpaid employees at its Sydney factory and across stores in Victoria, NSW, Queensland, West Australia, South Australia, Tasmania, and the ACT.

In a statement from Fair Work Australia, the employees ranged in roles from production assistants, compounders, sales assistants, retail supervisors and managers.

“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 statement read.

“Lush failed to provide its employees with a range of entitlements they were owed … The company identified the underpayments during an internal audit.

“Underpaid entitlements included minimum wage rates, rates for weekend and shift work, overtime rates and allowances. Record-keeping laws were also breached.”

Fair Work Ombudsman Sandra Parker said Lush had entered into an enforceable undertaking after co-operating with the investigation and demonstrated a “strong commitment to rectify all underpayments”.

“Lush has committed to stringent measures to comply with the law and protect its workforce. This includes engaging, at its own cost, an expert auditing firm to audit its compliance with workplace laws over the next three years,” Ms Parker said.

“This serves as a warning to all employers that if you don’t prioritise workplace compliance, you will not only have to deal with the cost of paying back significant amounts to employees, but you face reputational damage and ongoing formal scrutiny by the FWO.”

Lush is required to display public and workplace notices detailing its workplace law breaches, commission workplace relations training for staff in HR, recruitment and payroll roles, review all contracts of employment issued to salaried employees, and set up a hotline to help employees for the next three years.

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