Michael Hill Caught Out In Up To $25 Million Underpayments Over Six Years

Published July 12, 2019 (last updated July 21, 2020) -

Retail giant Michael Hill – with over 300 stores across Australia, New Zealand, and Canada is facing a $10 million to $25 million hit to their profit after the company discovered it underpaid staff by up to $25 million over the past six years.

The underpayment was revealed in an update issued to the ASX yesterday separate to the company’s now usual end of financial year trading update.

The company said it had started a full remediation program after an initial review of Australian retail employment contracts and rostering practices showed non-compliance with some requirements of the General Retail Industry Award for a number of store-based staff.

The Company said it had now started a more detailed review of all employee records, rostering practices and payments.

“While the more detailed review will be undertaken with urgency, due to the volume of data to work through and the complexity of the issues, we expect this program will still take several months to complete,” the company said yesterday.

“The remediation of these issues, which occurred over the last six financial years, is estimated to be a one-off cost in the range of $10m to $25m. It is not presently anticipated that rectification and remediation will have any material impact on the underlying earnings of the Company for FY20 or any future financial years.”

“We will move as quickly as possible to rectify any underpayments with those team members affected,” Mr Bracken said.

“I will be in contact with all team members today to apologise on behalf of the company and to provide an outline of the process we are following to establish who is impacted.”

Mr Bracken said the company would move as quickly as possible to rectify the under-payments and he said he would be in touch with all staff to apologise on behalf of the company to outline the process being used to determine which staff had been affected.

“I’m committed to engaging with our team members transparently and with absolute integrity and fairness,” he said.

Senior Employment Relations Adviser from Employsure, Michael Wilkinson says, “underpayment is a big issue right now, with more pressure than ever being placed on businesses to correctly pay their staff. Sometimes underpayment is deliberate, other times it’s accidental — but whatever the cause, the outcome is the same: intense scrutiny and hefty fines from the Fair Work Ombudsman.”

Mr Wilkinson says Australia’s complex workplace relations system is an ‘Achilles heel’ for many employers.

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