Ombudsman enters Enforceable Union with operators of Sydney’s Shangri-La Hotel

"Businesses paying annual salaries cannot take a 'set-and-forget' approach to paying their workers"

Ombudsman enters Enforceable Union with operators of Sydney’s Shangri-La Hotel

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers,” said Fair Work Ombudsman Sandra Parker after entering an Enforceable Union (EU) with the operator of Sydney’s Shangri-La Hotel over an error that resulted in significant under payment of over time rates, penalty rates, meal break penalties and annual leave loading entitlements over a 6-year period.

A release from the ombudsman’s office said the primary cause of the underpayments was the company failing to ensure that annualised salaries paid to some hotel staff were sufficient to cover all their minimum lawful overtime and penalty rate entitlements under the Hospitality Industry (General) Award 2010.  

The mistake, discovered during a proactive auditing campaign in 2018 found the underpayments occurred between 2013 and 2019 and individual payments range from $16 to $119,447.

In addition to underpayments, workplace laws relating to rostering, record-keeping and providing new employees with a Fair Work Information statement were also breached.

The Shangri-La has 4-months to calculate and back-pay amounts owing to every affected employee. 199 former and current employees have already been paid back but with some of the employees on skilled, working holiday, or student visa’s the company is going to have its work cut out for them tracking down employees that have now returned to Thailand, Burma, South Korea, Phillipines and the UK.

Parker said that operating company, Lilyvale Hotel, had cooperated and demonstrated commitment to rectifying underpayments. “Under the Enforceable Undertaking, the company has committed to stringent measures to comply with the law and protect its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance for each of the next two years,” Parker said.

Parker also warned that underpayments from insufficient annual salaries for employees covered by awards had become persistent in various industries. “Employers must ensure wages paid are sufficient to cover all minimum lawful entitlements for the hours employees actually work – otherwise a substantial back-payment bill awaits.”

In a statement to HRD, Shangri-La Sydney’s general manager, Philippe Kronberg said, “we deeply regret that we underpaid our staff. This should never have occurred, and we again extend our sincere apologies to those impacted”.

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