Sunglass Hut will back pay $2.3 million to its employees after admitting to underpaying individual workers by up to $42,912 in overtime wages.
The failure to pay overtime came from Sunglass Hut’s failure to schedule regular shifts for its in-store part-time workers on paper, thus breaching the requirements of the General Retail Industry Award (GRIA), which outlines that employers put into writing initial rosters and any variations made thereafter.
Luxottica Retail Australia, which trades as Sunglass Hut, first began contacting all affected employees in 2016 to begin back payments.
The Fair Work Ombudsman (FWO) recently placed the company under a court-enforceable undertaking after the company revealed it had underpaid 620 of its current and former employees across 253 store locations in all states.
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Fair work ombudsman Sandra Parker said in a statement released yesterday that Sunglass Hut had committed to revamping its policies and practices.
She also urged all businesses to regularly check and update their policies.
“This outcome should also serve as a warning to all businesses that they need to actively check that they are paying their staff correctly,” she said.
Speaking to SmartCompany, McDonald Murholme’s principal lawyer Andrew Jewell calls this a “classic case of not understanding penalty rates”.
He advises businesses “not to put your head in the sand” and to engage with the FWO to ensure compliance with minimum standard requirements, which can change.
“If there’s later evidence that there was something wrong and you did nothing about it, then the exposure on penalties could be massive,” he says.
Jewell also warns small businesses have even more to gain from speaking with the FWO.
“There is going to be a danger in perhaps not having access to internal legal advice or expertise.
“For small businesses, it might be even more important to engage with the ombudsman or seek your own up-to-date advice.
“If you haven’t spoken to the ombudsman, you’re just going to look like the sort of business that’s deliberately making underpayments.
“It’s a protection against enforcement and penalties to engage with the ombudsman. If something goes wrong you can say, ‘hey, I’m the sort of business who tries to get on top of things and this was a genuine mistake’.”
In the next three months, Sunglass Hut will be required to pay the remaining $815,391 it owes to 163 workers, and an additional contrition fine of $50,000 to the National Association of Community Legal Centres.
During this time, it will also need to “take all reasonable steps” to find every relevant worker and offer a letter of apology.
Under the enforceable undertaking, external auditors will make yearly audits to oversee its compliance with employee obligations. Sunglass Hut will be required to cover these costs.
The GRIA states part-time workers are entitled to time-and-a-half pay for the first three hours out of formally written and agreed hours, then double-time after that. Overtime rates also come under Sunday and public holiday rates.