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Michael Hill International has announced it plans to remunerate Australian staff after an internal review found systematic underpayment over six years.
Michael Hill International has announced it plans to remunerate Australian staff after an internal review found systematic underpayment over six years.

Michael Hill underpaid staff by up to $25 million

An internal review by Michael Hill International has discovered widespread underpayment of its Australian retail workers over the past six years.

In a statement issued to the media and the Australian Stock Exchange last week, the company revealed that the underpayment was estimated at between $10 million and $25 million, and had occurred due to non-compliance with the General Retail Industry Award.

Michael Hill operates 168 stores in Australia.

The Fair Work Ombudsman is reportedly “concerned by the scale” of the underpayments and was not made aware of the problems prior to the media release. The office ‘will be contacting Michael Hill International’, according to the ABC.

The discovery of the underpayments was made after the company’s CEO Daniel Bracken commissioned accounting firm PriceWaterhouseCoopers (PWC) to conduct a standard review of the business, after taking the reins in November 2018.

Daniel Bracken
Daniel Bracken
“We will move as quickly as possible to rectify any under-payments with those team members affected”
Daniel Bracken, CEO Michael Hill International

PWC’s report – which covered both employment contracts and rostering – found that the Award had been widely misapplied over the past six years.

As a result, Bracken has now authorised a full investigation – expected to take several months – in order to determine exactly how many and which staff members are affected, remunerate them accordingly, and ensure full compliance with the Award in future.

“We will move as quickly as possible to rectify any under-payments with those team members affected,” Bracken said in a statement, adding that he had been in contact with staff to apologise on behalf of the company.

A statement from the company indicated that it did not expect the repayments to ‘materially impact’ underlying earnings for FY19-20.

The company also released its quarterly trading report, showing flat same-store sales however a slight improvement of 0.1 per cent total sales, up from -1.5 per cent on the previous quarter.

Its share price tumbled 9 per cent following the dual announcement.

The news caps off a mixed year for Michael Hill, which has seen a slow but steady turnaround of its fortunes following a disastrous foray into the American market.

It went through two CEOs in less than five months and its New Zealand operation was fined NZ$169,000 (AU$160,000) over misleading warranties in 2018. The company also closed the last of its Emma & Roe stores earlier this year.

 

More reading:
Michael Hill sales slump but company shows signs of improvement
Michael Hill fined for misleading warranties
Michael Hill CEO resigns
Michael Hill closes remaining Emma & Roe stores

 











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Sunday, 18 August, 2019 06:33am
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