Jeweller owes staff up to $25m in unpaid wages

The company says the underpayment affects only its Australian workers.

The company says the underpayment affects only its Australian workers. Photo: Getty

Jeweller Michael Hill International owes its workers up to $25 million for six years of underpaid wages.

The Brisbane-based jewellery chain uncovered the underpayment after a review found the general retail industry award had been misapplied across the company.

Michael Hill said on Thursday it had also started a thorough review of all employee records, rostering practices and payments.

“While the more detailed review will be undertaken with urgency, due to the volume of data to work through and the complexity of the issues, we expect this program will still take several months to complete,” the company said.

New company chief executive Daniel Bracken said the jeweller would contact all staff on Thursday to apologise and outline a process to quickly pay those affected.

“I’m committed to engaging with our team members transparently and with absolute integrity and fairness,” he said.

“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.”

Michael Hill has 168 shops in Australia, as well as 52 in New Zealand and 86 in Canada. The underpayment – estimated at $10 million-$25 million in total – affects only the company’s Australian staff.

Separately, the retailer said it had managed to stop a decline in same-store sales in the three months to June 30.

They were up 0.1 per cent to $123 million, compared with the previous year, with total sales down 0.8 per cent to $133.6 million.

In Australia, same-store sales were down 2.4 per cent to $69.1 million for the quarter, and down 5.9 per cent to $310.3 million for the year.

“Even though we are experiencing an extremely competitive retail environment, particularly in Australia, with intensive competitor clearance related activities and lower foot traffic, the company has continued to deliver improved sales momentum for the fourth quarter,” Mr Bracken said.

The company did experience “margin compression” as it cut prices to remain competitive. Its full-year profit margin was at 61.1 per cent compared with 62.8 per cent for the previous year.

Online sales were up 43.6 per cent for the year to June 30, to $16 million – more than double that of Michael Hill’s largest physical shop and making up 2.8 per cent of all sales.

The jeweller closed eight underperforming Australian shops during the year and opened four new ones.

Michael Hill said it was increasingly focused on uniquely differentiated products, such as its new branded bridal collections.

At 1111 AEST, Michael Hill shares were down three cents, or 5.26 per cent, to 54 cents.

-with AAP

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