Travel giant Flight Centre has been forced to deny claims of a “cult-like” workplace culture, customer price-gouging and staff underpayment, noting the allegations have arisen during negotiations for a new EBA.
The ABC raised allegations that Flight Centre has employed staff on a base retainer of $31,500 – below the minimum wage – and that its incentives structure has developed a culture of price-gouging in order for employees to earn a living wage.
It has also been alleged that the culture at Flight Centre is akin to “a cult”, where heavy drinking and partying are encouraged, and those who do not partake are ostracised.
“It works for people who want work to be their life — who only want to be friends with people from Flight Centre and date people from Flight Centre… It’s very culty,” one former employee was quoted as saying.
Meanwhile, a current employee was quoted as saying that in terms of price-gouging through hefty mark-ups, “towards the end of the month, if you’re struggling to hit your target, you kind of have to pull the strings… You have to do what you have to do to get you there.”
A spokesperson for Flight Centre insinuated that it was no coincidence the allegations surfaced during negotiations over its Enterprise Bargaining Agreement (EBA) – a first for the group.
“This will be our first EBA. We're currently under a retail award,” the spokesperson told My Business.
“We’ve been in discussions with our people for a month or so.”
As such, the timing of the allegations has raised suspicions, with Flight Centre disputing their accuracy.
“Flight Centre has provided the ABC with a detailed response and has strongly denied various allegations,” the spokesperson said.
“It’s disappointing that these allegations have been aired publicly, but it has also highlighted the need to move to simpler and easier to understand pay model, which is what we are doing currently via an Enterprise Bargaining Agreement. The EBA is reliant on us ensuring that our people are better off overall and we have already made this commitment to them.”
The spokesperson claimed that Flight Centre has “a very strong and positive culture, which is generally celebrated and has in fact led to us winning a number of awards”, and said the group strongly denied the allegations that the ABC put to us, particularly in relation to our people being paid below award levels”.
On the issue of price-gouging, the spokesperson said their processes do not support such claims.
“Margins are generally paid to the company by the supplier. Our margin information is publicly available and it does not support claims that either excessive marking up is taking place or that it is happening more frequently.
“As outlined in our philosophies, we strongly believe in a fair margin and we monitor this proactively.
“Competitive forces obviously dictate prices – there is complete visibility for travellers in relation to pricing – and there are additional safeguards for our customers to use in the form of price beat positions and price drop protection.”
It was reported that Flight Centre is currently the subject of a Fair Work Ombudsman (FWO) investigation into employee remuneration, but a spokesperson for the FWO refused to confirm this.
In an unrelated case, Flight Centre was fined $12.5 million in April this year after a court found it guilty of attempted price-fixing with three major airline.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.