Made Estabishment, the restaurant group operated by chef George Calombaris, has admitted to inadvertently underpaying current and former staff members a total of $2.6 million.
In a statement issued to staff members and also released to the public, the group stated that 162 of its 430 team members had been affected.
An analysis by KPMG, which followed an internal review, uncovered a series of unintentional underpayments where salaries and overtime were paid at rates lower than they should have been. The same “historically poor processes used in classifying employees” also resulted in almost half of the group’s affected team members being paid a higher base salary than they should have received, however all 162 affected staff members were not paid the overtime rates they were entitled to.
The statement made it clear that overpayments would not be reclaimed and that these staff members would continue to earn the same rate.
Described by Made Establishment as a “completely unacceptable situation”, staff affected by the underpayments – which span back as far as six years – should have started to see the back-pay in their accounts by the afternoon of 3 April. The payments are being based on a 38 hour working week and any hours beyond that will be paid at the highest overtime rate of 200 percent.
The underpayments affected staff at The Press Club, Gazi and Hellenic Republic, but not to the fast casual concept, Jimmy Grant’s.
The Fair Work Ombudsman has been advised of the incident and the company’s corrective action, and Made Establishment’s statement said it will be working collaboratively with Fair Work throughout the process.
Fair Work first raised concerns about the group’s payroll system more than 18 months ago. “Further investigation by us at this time should have uncovered the problem and allowed the business to act with more speed and focus to sort it out,” the statement reads.
Calombaris, who late last year spoke to Hospitality magazine about the importance of building a team and mentoring the next generation of industry professionals, is currently overseas filming but added a comment at the end of the company’s statement, addressed to his staff.
“You, our amazing team, are the key to our success and I am so sorry we have messed up and let you down on a fundamental, which is to ensure our people are paid what they are entitled to,” it reads.
“We have grown so much over the past six years and our internal systems clearly let us down in dealing with the increased complexity and size of the business. We received a heads-up from FWO more than 18 months ago, which should have resulted in us fixing our systems sooner. Regrettably, our attention to detail at that time wasn’t at a level it should have been, but we now have a CEO and a human resources manager in place, supported by good processes and systems to properly support the business.
“We are truly sorry for the impact this has had on our incredibly hard working, talented and dedicated team. We are a family here at Made Establishment, and I care deeply about everyone who works with us.”