Lush signs enforceable undertaking after repaying staff $4.4 million

Image of Lush store

Beauty company Lush has finished back paying over 3000 employees a total of $4.4 million, and has signed an enforceable undertaking with the Fair Work Ombudsman after it identified underpayments across its staff network in 2018.

Lush’s breaches related to minimum wage rates, rates for weekend and shift work, overtime rates and allowances, as well as record-keeping laws.

FWO Sandra Parker said an enforceable undertaking was appropriate, as Lush had cooperated with the investigation and demonstrated a commitment to fix the issue.

“Lush has committed to stringent measures to comply with the law and protect its workforce,” said Parker.

“This matter serves as a warning to all employers that if you don’t prioritise workplace compliance, you will not only have to deal with the cost of paying back significant amounts to employees, but you face reputational damage and ongoing formal scrutiny by the FWO.”

The FWO’s investigation said Lush’s underpayments were caused by an inadequate workplace relations system and processes, a lack of training for staff and managers, a manual payroll system, and the absence of a HR department in a rapidly growing business.

The undertaking requires Lush to, among other things, display public and workplace notices detailing the nature of the breach, which impacted staff members across all levels of Lush’s workforce, and adequately train payroll and human relations staff.

At the time of the initial announcement, Lush director Peta Granger said she hoped customers can forgive them for the “monumental mistake”.

“It’s been a painful mistake to learn [from], but it will absolutely drive our decision making and influence us into the future,” Granger said.

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