Celebrity Chef’s restaurants underpaid staff up to $2.6m

by HCA04 Apr 2017
Celebrity chef George Calombaris has been forced to pay out up to $2.6 million for underpayments to 403 of his restaurant’s employees. This includes staff at his Melbourne restaurants The Press Club, Gazi and Hellenic Republic.

MAdE Establishment Group were first alerted to the problems by the Fair Work Ombudsman more than 18 months ago.

The hospitality business used professional services firm KPMG to conduct a comprehensive analysis after a new chief executive and human resources manager started in late 2016 at the MAdE Establishment operations.

The findings included instances of unintentional underpayment - where the salaries and overtime paid to some staff were below what they should have been. The company blamed "historically poor processes".

The Masterchef judge is MAdE Establishment Group's director and founder, and said the company had not properly managed its huge growth over the past six years.

"Regrettably our attention to detail at that time wasn't at a level it should have been, but we now have a CEO and Human Resources Manager in place, supported by good processes and systems to properly support the business,” said Calombaris.

He added that he was "devastated" by the situation, which led to staff members being repaid an average of more than $16,000. The company said it had calculated the reimbursements using the highest overtime rate of 200%.

Calombaris said the staff affected had been reimbursed yesterday.

"Our amazing team members are the key to our success. I am sorry we have messed up and let you down on a fundamental issue, which is to ensure our people are paid their full entitlements," he said in a statement.

"I am devastated by what has happened and we have been working extremely hard to fix this.”

Moreover, analysis commissioned by the group found that a mix-up in how overtime was calculated also led to a number of staff being overpaid their base salary. However, those who had been overpaid would not be required to repay any money.

The Fair Work Ombudsman has been advised about the payment of the $2.6 million and the directors said they would work "collaboratively" with Fair Work through the process.

Calombaris, 38, began building his restaurant empire in 2006, with the opening of The Press Club on Flinders Street in Melbourne.

Calombaris is currently overseas.

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