Former Staff Contact
We want to tell you about a serious mistake we’ve uncovered in the business, to apologise, and to tell you how we are going to put it right. We have unearthed huge compliance issues in our payroll system that have resulted in many staff being underpaid for years.
We want you to know that we would never knowingly underpay you – this was not deliberate – and it goes against everything we value and believe in, and we are so sorry to have let you down in this way.
Last August a concern was brought to us by Support Team members, which lead to a series of investigations over the following months. This included an initial review of our retail contracts, policies, rostering and salaries and by December we‘d confirmed three areas of the Retail Award had been breached. We then engaged an external payroll company to process and calculate the money owed, and the calculations were due back in March. Unfortunately, this process uncovered further errors and identified it was a far more significant issue with our payroll system than we originally thought.
At this point we knew we needed expert help, so we began working with the National Retail Association. They conducted an extensive review of our whole business which was completed this month. We’ve also been working with payroll experts, Roubler, to roll out a new compliant payroll system to guard against this happening again.
We can reassure you that these underpayments have nothing to do with overtime rates paid for late night trade or our weekend and Public Holiday penalty rates which we chose not to cut. The problems have to do with intricate elements of the the Retail and Manufacturing awards, which our very manual payroll system was just not sophisticated enough to interpret correctly.
For example, sometimes correct rates were not applied when staff did not have two consecutive days off, when shifts were worked without the minimum 12 hour break in between, when staff worked more than 11 hours in one day, when part-timers worked outside their contracted pattern of work without sufficient documentation in place and when our manufacturing production assistants were incorrectly classified.
Now this is our fault. We should have had far more respect for your pay and upgraded our payroll infrastructure to keep up with the growth of our business. Knowing what we know now, it was irresponsible to imagine such an outdated system would work for a company our size. But since realising just how big these compliance issues are, we’ve worked relentlessly to put things right and ensure they don’t happen again. And there’s a few stages to this…
So, first of all, we want to reassure you we will be paying back every person who has worked for LUSH Australia, under a Modern Award, every cent they are owed with interest. We estimate the total back payments to be collectively about $2 million, and we have already set that money aside for as soon as the calculations are done. We wanted to not just recalculate your pay, but to do it in a way that allows you to look at your work and shift history and see how the new calculations were made. In order to have a system that allows this level of transparency we’ve invested $1.5 million for external payroll experts to build a system onto which 200,000 of your old handwritten timesheets will be scanned, indexed and entered so that the last 8 years of payroll can be re-run accurately.
Depending on which Award you fell under and your pattern of work, the amounts of back pay each person is owed will vary greatly, with some being owed nothing at all.
But whether it’s $1 or $1000 you will be paid any money owed, plus interest. The back pay process has started and the payroll service provider are working as fast as they can, but this is not an overnight task. We are confident that verified calculations will begin to be paid out towards Christmas.
We’re committed to connecting with every employee who’s been affected by this, past and present, dating back to the introduction of the modern awards in 2010, so we can make sure everyone is paid what they’re entitled to. So if you know somebody or you worked for LUSH in that time, please register your details through this website and contact form. Roubler, our payroll service provider, will also help us track down past employees and if we’re not able to find them we’ll entrust their back payment to the Australian Tax Office, so their money is always there should they come forward in the future.
This week we begin rolling out a new, compliant payroll system that will interpret the awards automatically and ensure the correct rates are paid to moving forward. We’ll do parallel testing to begin and as an additional safeguard we’ll be audited weekly by the National Retail Association until we have total confidence that the way we interact with the system ensures all staff are paid correctly.
We’ve also reported the compliance issues to the Fair Work Ombudsman and the relevant Government departments and we want to work with all of them, and Unions, to sort this situation out as quickly and transparently as possible. We think we’ve got a good plan in place but we’re very open to their contributions, and yours.
And finally, the most important part – we are sincerely sorry that this has happened. It was a huge mistake, we’ve got no one but ourselves to blame. We want to thank you for your contribution to LUSH over the years and ensure you that we will continue to build a strong and bright future.
Mark Lincoln & Peta Granger
Directors, Lush Australia
If I am owed any money when will I get it?
The back pay calculation process has started and the payroll service provider are working as fast as they can, but this is not an overnight task. We are confident that verified calculations will begin to be ready around December and as each calculation is released to us it will be paid out immediately.
Payments will begin to be made as soon as they are ready and we have had them verified by a third party. For some this will be sooner than others, as it will depend on the length of time you have worked for us and how many errors may relate to your payment.
How much money will I get?
Every staff member’s situation is unique depending on your role, classification, which Award you fall under and your pattern of work.
For example, small errors across those eight years could add up to a sizeable sum of money for some staff – for other staff there may only have been the occasional error amounting to a small underpayment, whilst for others there will have been no mistakes at all.
Whether it’s $1 or $1000 you will be paid any money owed, plus interest.
How is my potential back pay calculated?
We wanted to not just recalculate your pay, but to do it in a way that allows you to look at your work and shift history and see how the new calculations were made. In order to have a system that allows this level of transparency we’ve invested $1.5 million for Roubler to build a software system onto which they will scan, index and enter 200,000 of your old handwritten timesheets so that the last 8 years of payroll can be re-run accurately.
Interest will be added on to each calculation and we will use the standard interest rate suggested by the Federal Court of 5.5%, which is also used in the Fair Work Commission rulings.
How can I trust the calculations?
The calculations are being processed by an external payroll expert, Roubler. The last 8 years of payroll will be re-run through their compliant and automated system.
After the calculations are complete the National Retail Association will spot check the back payment calculation to ensure an additional layer of accuracy and compliance. LUSH will also consult with the Fair Work Ombudsman and welcome their contribution to the process.
Finally, historical timesheets and payroll records will be made available to current and former staff to ensure complete transparency of your back payment.
What if I think my calculations are wrong?
Please contact us immediately and we will review your query and work with you to resolve it as quickly as possible.
If you are unsatisfied with our response you always have the right to contact the Fair Work Ombudsman at any stage.
How can I be sure I’ll be paid correctly from now on?
At the beginning of July we began rolling out a new, compliant payroll system that will interpret the Awards automatically and ensure the correct rates are paid to you moving forward. Whilst we roll out this system and gain confidence in using it, we will run parallel tests and as an additional safeguard we will be audited weekly by the National Retail Association until we have total confidence that the way we interact with the new system is working smoothly and pay calculations are fully accurate.
In the near future the Roubler system will enable all employees to view the value of each shift worked and its relevant entitlements in real time.
Going forward, the Modern Awards within the Roubler system are maintained by industry experts and are audited externally on an annual basis to ensure compliance is maintained. Their system has automatic updates built in, and so if there are any changes under the awards to rates of pay or the way people are paid, they will be incorporated from the minute they come into force. Roubler provide their payroll system for many companies and ours will eventually be no different, except for a small amount of customisation needed to their system to ensure that some Lush-specific adaptations are included. For example, the higher penalty rates, and not the reduced penalty rates in the Modern Awards, will still be paid to our staff; you will be able to apply for birthday leave, and our policies and procedures will be available.
If you have queries regarding your pay at any time, please first contact your direct manager. If they cannot answer your question please contact our Payroll Team and we will review your query and work with you to resolve it as quickly as possible.
If you are unsatisfied with our response you always have the right to contact the Fair Work Ombudsman at any stage.
Will this affect my bonus scheme?
The national back payment scheme will NOT affect your bonus scheme.
Will this affect my tax, HECS/HELP/TSL or Centrelink?
There could be flow on effects to your tax, HECS/HELP/TSL or Centrelink.
We have committed to fixing the issue in the most comprehensive and transparent manner possible, which is by repaying what we owe, plus interest, to everyone who’s been affected by this error. We will make any of the statutory deductions as required by the government.
We recommend you get independent financial advice should you have any further questions.
How will this affect my superannuation?
Where the underpaid wage would have been eligible for superannuation payment, we will also pay this into your elected superannuation fund.
How are you going to contact former staff?
We want to make contact with every employee who’s been affected by this – past and present – dating back to the introduction of the Modern Awards in 2010, so we can make sure everyone is paid what they’re entitled to.
If you know somebody who worked for Lush during that time, please ask them to register their details through lushbackpay.com.au. Current staff don’t need to do this.
Roubler, our payroll provider, will also assist us to track down past employees, but if after all these efforts we’re not able to find some individuals we’ll entrust their back payment to the Australian Tax Office, so their money is always there should they come forward in the future.
I’d like language support, where can I access this?
The Australian Government Department of Social Services offers free translating to permanent residents and select temporary or provisional visa holders within the first two years of their eligible visa grant date.
The Free Translating Service can be used by anyone who holds a permanent visa (except return resident visas), or one of the following temporary visas:
- Prospective Marriage visa (subclass 300)
- Partner (Provisional) visa (subclass 309)
- Partner (Temporary) visa (subclass 820)
- Dependent Child visa (subclass 445)
- Temporary Humanitarian Stay visa (subclass 449)
- Temporary Humanitarian Concern visa (subclass 786)
- Temporary Protection visa (subclass 785)
- Safe Haven Enterprise visa (subclass 790).
All other temporary visas including bridging visas are unfortunately ineligible for the Free Translating Service, but should you need further help with translating any of these documents please get in contact.