Cosmetic giant Lush has avoided prosecution after it back-paid 3130 former and current staff more than $4 million.
The company has entered into an Enforceable Undertaking with the Fair Work Ombudsman, requiring it to make a $60,000 “contrition payment”.
Cosmetic giant Lush avoids prosecution
Lush, which manufactures cosmetics at a factory in Villawood, NSW, and sells them online and through stores, self-reported the underpayments in 2018.
For eight years, the popular cosmetics company underpaid:
- minimum wage rates;
- rates for weekend and shift work;
- overtime rates and also allowances.
Lush also breached record-keeping laws.
The underpayments happened as a result of Lush’s inadequate workplace relations systems and processes, including:
- a lack of training for staff and managers;
- a manual payroll system; and also
- the absence of a HR department in a rapidly growing business.
The affected employees worked at its Sydney factory and across stores in Victoria, NSW, Queensland, WA, South Australia, Tasmania and the ACT.
They worked as production assistants, compounders, and sales assistants, in addition to retail supervisors and managers.
Instead of taking Lush to court, Fair Work instead offered an Enforceable Undertaking.
Under the terms of the EU, Lush will make a token $60,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.
It also promised to undertake future external audits and display notices detailing the underpayments.
Finally, it has committed to organising workplace relations training for human resources, recruitment and payroll staff.
Got off lightly
Industrial advocate Miles Heffernan says Lush got off lightly.
“Here is yet another company underpaying its workers by millions of dollars, and all they get is a slap on the wrist,” he said.
“This multi-million dollar wage theft happened because of negligence, and there is no excuse for it.
“Lush is an international company that organises manufacturing, stock supplies, logistics, advertising and IT systems – why can’t they get their wages right?”
Fair Work Ombudsman Sandra Parker defended the Enforceable Undertaking.
She described it as “appropriate” considering Lush had cooperated with the investigation and also demonstrated a strong commitment to rectifying the underpayments.
“Under the Enforceable Undertaking, Lush has committed to stringent measures to comply with the law and protect its workforce.
“This includes engaging, at its own cost, an expert auditing firm to audit its compliance with workplace laws over the next three years.”
Fair Work says it took into account the significant impact of the COVID-19 pandemic on Lush’s operations when coming up with the token $60,000 contrition payment.
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