Michael Hill to rectify six years of underpayment

Jewellery retailer Michael Hill has revealed it will spend up to $25 million repaying its workers, after a review of employment contracts and rostering practices found a “historic misapplication” of the Award across six years.

The initial review was completed with the assistance of independent experts PriceWaterhouseCoopers, though a more detailed review will be undertaken “with urgency” due to the complexity of the issue. Michael Hill expects the review to take several months to complete. 

“I’m committed to engaging with our team members transparently and with absolute integrity and fairness,” said Daniel Bracken, chief executive of Michael Hill International.

“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.

“We will move as quickly as possible to rectify any under-payments with those team members affected.”

Michael Hill confirmed to Inside Retail that the underpayment issue only affects Australian employees.

Employee underpayment has been a common topic in the retail industry over the last year, with Super Retail Group, Caltex, and Lush, among others, owning up to the mistake. 

Annual same-store sales down

Michael Hill announced its underpayment finding the same day it revealed a 3.5 per cent fall in total same-store sales to $523.9 million across all markets for FY19.

In Australian, same-store sales fell 5.9 per cent to $292 million, down from $310.2 million the prior year, with eight stores closing over the year.

In New Zealand, the retailer saw a decrease in same-store sales of 4.7 per cent to NZ$115.2 million, down from NZ$120.9 million, with two stores closing and two opening over the period.

“Our e-commerce business has continued to grow at a significant rate, with annual sales now more than double that of our largest physical store,” Bracken said. 

“Over the course of FY20, we will continue to invest in this important future growth channel for the group. 

“As our strategic initiatives and customer-led retail operating model continue to unfold, and with a full-strength leadership team now in place, I am excited by the year ahead, and our ability to grow market share.”

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