Michael Hill to Repay Retail Workers up to $17M

RAPAPORT... Michael Hill will hand out between AUD 10 million ($7million) and AUD 25 million (just under $17.5 million) to compensate retail employeesin Australia, after discovering it had been underpaying them. The jeweler had been wrongly applying the pay rates mandatedby the Australian government's General Retail Industry Award document, itadmitted in a statement Wednesday, following a review. Daniel Bracken, the retailer's CEO since November 2018, instigatedthe review, which he conducted together with PricewaterhouseCoopers. It foundthat the failure to comply had spanned the past six years, based on a sample ofteam members. Bracken will contact all employees to apologize and explain theprocess for establishing which of them had lost out, he explained. "When we identified there was an issue, I mobilized a team,supported by independent external experts, to determine the scale of theproblem, identify the individuals affected, and to ensure full compliance withthe award going forward," Bracken said. "We will move as quickly as possible torectify any underpayments with those team members affected." The company hasstarted a more detailed review of all its employment records and practices. The discovery caps off a challenging year for theAustralia-based jeweler, with global sales falling 4.5% to AUD 563.4 million ($393.5million) in the financial year that ended June 30, it reported Wednesday. Same-storesales slipped 3.5%. The slowdown eased in the fourth fiscal quarter, withrevenues declining 1% to AUD 132.6 million ($92.6 million) in the three monthsto June. The company's stock price dropped 9% Thursday. "Even though we are experiencing an extremely competitiveretail environment, particularly in Australia, with intensive competitorclearance-related activities and lower foot traffic, the company has continuedto deliver improved sales momentum for the fourth quarter," Bracken noted. The one-off compensation cost will not significantly affectthe company's underlying earnings in this or future years, it added. As of June 30, Michael Hill operated 168 stores inAustralia, 52 in New Zealand and 86 in Canada.Image: Daniel Bracken. (Michael Hill)