Cosmetic retailer Lush Australia has publicly apologised for underpaying up to 5,000 former and current staff around $2 million.
Peta Granger, director of Lush Australia, explained that they have launched a payback scheme for staff to ensure they are all fully reimbursed with interest.
The error originated back to 2010 when the Australian government introduced modern awards – legal documents that outline the minimum pay rates and conditions of employment, of which there are more than 100 covering different sectors.
Once Lush Australia realised there was a problem, the business had to call on external investigators to help them identify its origins.
The company blamed the error on its reliance on manual pay processes and its failure to update to more suitable payroll software to keep up with business growth.
Granger told reporters in Sydney: “What has become alarmingly clear to us at Lush Australia is that our internal payroll systems have not kept pace with our growth. In recent months we have unearthed some serious miscalculations of people’s pay.
“We should have had far more respect for our people’s pay and upgraded our payroll infrastructure to keep up with the growth of our business.”
It is thought that some employees could be owed up $10,000 in back pay, after Lush Australia confirmed that it had breached three areas of the retail award.
“Knowing what we know now, it was irresponsible to imagine that such a manual and outdated system could possibly work on a business our size,” added Granger.
“I want to be absolutely clear we would never knowingly underpay our staff. It is not deliberate and goes against everything we value and believe in at Lush.”
