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George Calombaris ‘Sorry’ For Underpayments

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3 weeks ago

By Leigh Johnston

Celebrity chef George Calombaris says he is sorry for underpaying his restaurant staff and hopes he can now be a “voice for change” in the hospitality industry.

ABC reports the interview, which will go to air tonight, shows the former MasterChef judge expressing contrition over the scandal – while also explaining his perspective on the circumstances which led to his seven-figure swindle.

Speaking publicly for the first time about the matter, the former MasterChef judge told 7.30’s Leigh Sales he was “gutted” when he realised he had underpaid staff at a number of his restaurants $7.8 million.

Fair Work inspectors found significant underpayments occurred because they failed to correctly apply annualised salary arrangements for some staff, including by failing to conduct annual reconciliations to check that workers on annual salary arrangements were paid overtime and penalty rate hours worked.

His restaurant MAdE has since backpaid $7,832,953 to 515 current or former employees of Press Club, Gazi and Hellenic Republic for work between 2011 and 2017. A further $16,371 has been backpaid to nine employees of Jimmy Grants. His companies will also make a $200,000 “contrition payment” under a court-enforceable undertaking made with the Fair Work Ombudsman.

He said the underpayment was an oversight and that his employees “are everything to us” and he will not be “shying away from the mistake we made.”

“I won’t forget that afternoon in 2017 when we sat there with my new business partners after we’d done a full audit for the business and discovered the underpayments,” Calombaris told 7.30.

The chef claims the underpayment was not malicious or deliberate. Instead, he said:

“I want to apologise to all my team, both past and present, for the effect I’ve had on them, we’ve had on them. I apologise to them.”

“I’m not here to blame anyone,” he said.

“I take full responsibility for this. I’m sorry.”

He also explains it was the consequence of inexperience on behalf of him and his young business partners, who failed to install payroll practices to adequately remunerate employees.

“The thing about 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.”

Calombaris said he now wanted to be a “voice for change”.

“We’re multiple restaurants. There’s single restaurants out there, I understand it’s hard, they haven’t got the opportunity where they can have CEOs and infrastructure, but it doesn’t mean they can do this,” he said.

“They have to seek advice, they need to make sure they’re on top of … the food, the service, the great wine, the great dishes, that at the back it needs to be just as delicious.

“Right now, there’s 642 team members that I absolutely adore. We aren’t closing our restaurants, we’re here. And it’s my job as their leader to keep pushing forward and keep speaking this message, not shying away from the mistake we made, but also acknowledging that we fixed it.”

Since the scandal broke, Michael Wilkinson, a Senior Employment Relations Adviser has defended Australian employers in an opinion article that featured in the Daily Telegraph. In the article, Mr Wilkinson says: “Not all employers are deliberate ‘thieves.’ In fact, the vast majority aren’t.”

“I’m not condoning the deliberate underpayment or exploitation of employees. But from my experience, the vast majority of businesses work hard to ensure their employees are properly paid. The Employsure workplace advice line receives over 260,000 thousand calls a year from businesses seeking clarity on these matters, which shows that businesses are actively seeking help to avoid anything untoward or potentially criminal takes place,” he said.

In this context – practices and attitudes making wage theft rampant – the only positive thing about Calombaris’ case is that, combined with other high-profile cases, it has triggered enough public outrage to get the attention of politicians.

The federal government has indicated it will propose new laws to make wage theft a criminal offence, punishable with prison time.

However, small business groups have since hit back at criminalising wage theft, and Mr Wilkinson says along with tougher laws, more resources and education are also needed.

“It’s no secret that we have one of the most complex workplace relations systems in the world. As a result, employers are especially prone to making wage errors. Between casual, part-time and full-time workers, along with rising minimum wages, various penalty rates and award entitlements, it’s a merry-go-round and can be hard to navigate.”

“The overwhelming view that we have heard from small businesses is that legislation is far too complicated.”

“Most employers want to do the right thing. Most problems arise because of misunderstandings about the application of the law, rather than a blatant disregard for it.”

“The key objective of any government in this space should be to make it as easy as possible for employers and employees to know their rights. The compliance system needs to be sufficiently robust to deter the small proportion of employers who would be tempted to do the wrong thing,” he said.

In his views on criminalising wage theft, Mr Wilkinson asserts, “Employers don’t belong in the criminal justice system. Workplace matters are best dealt with elsewhere.”