Jewellery giant Michael Hill is facing up to $25 million in wage remediation costs after it revealed a six-year misapplication of the award used to pay a number of its Australia-based workers.
In an announcement posted to the ASX, Michael Hill International Limited said that an initial review of its Australian retail employment contracts and rostering practices by new CEO Daniel Bracken showed non-compliance with some requirements of the General Retail Industry Award for a number of the company’s Australia-based employees.
Since uncovering the misapplication, the Australia-headquartered company said it had commenced a more detailed review of all employee records, rostering practices and payments “with urgency”.
Michael Hill said it expects the remediation of these systematic underpayments, which occurred over the last six financial years, to be a one-off cost for the entity that could be anywhere between $10 million and $25 million.
The statement noted that the volume of data to work through and the complexity of issues means the full remediation program could take several months to complete.
Commenting on the company’s announcement, Michael Hill International CEO Daniel Bracken said he was committed to engaging with his team members “transparently and with absolute integrity and fairness”.
“When we identified there was an issue, I mobilised a team, supported by independent external experts, to determine the scale of the problem, identify the individuals affected and to ensure full compliance with the award going forward,” he said.
Mr Bracken said the company will move “as quickly as possible to rectify any underpayments with those team members affected”.
“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,” the CEO continued.
It is not presently anticipated that rectification of award issues and remediation of affected employees will have any material impact on the underlying earnings of the company for FY20 or any future financial years, the ASX and NZX announcement read.
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