Lush launches $2m back-pay scheme after payroll failure

Cosmetics retailer Lush Australia has announced a $2 million national back-pay scheme after discovering serious payroll-system errors.

The errors are said to date back to the introduction of Modern Awards in 2010.

Lush Australia Director Peta Granger says external audits will take some months to complete – but that early investigations suggest more than 5000 Australian staff across the retail and manufacturing businesses could be collectively entitled to as much as $2 million in back pay over an eight-year period.

“We’re deeply sorry to our valued staff and customers that we’ve failed to uphold the values that we have always believed in and the high standards that we’ve always sought to achieve,” Ms Granger said.

“This resulted from a very serious failure on our part to upgrade our internal systems. 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.”

“The errors have not affected any of the overtime rates paid for late-night trade or weekend and public-holiday penalty rates, which we chose not to cut last year.

“The problems are to do with intricate elements of the Retail and Manufacturing Awards, which our very manual payroll system was just not sophisticated enough to interpret correctly.”

Following a lengthy investigation, Ms Granger says Lush “[worked] around the clock” to finalise the solution.

“Whether it’s $1 or $1000, we’re committed to connecting with every employee who’s been affected by our mistake,” she said.

“To meet this commitment, we’ve invested $1.5 million for external payroll experts to build a system on to which 200,000 handwritten paper timesheets will be scanned, indexed and entered so that the last eight years of payroll can be rerun accurately.”

“We’re calling on everyone who’s worked for us in Australia over the past eight years to get in contact and register their details online, in case you are one of the people owed money.”

NRA CEO Dominique Lamb has commended Lush for the way they have responded, saying: “While the compliance issues are clearly regrettable, Lush’s response has been a textbook example of how a business should recognise its mistakes, take ownership of them – and fix them.”

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