Fashion giant guilty of hundreds of underpayment offences

Australia’s largest specialty fashion retail group has pleaded guilty to 324 offences of underpaying long service leave as the NSW government warns it will crack down on compliance ahead of a massive expansion of entitlements to thousands of workers.

Mosaic Brands Limited,which has 1110 stores nationally including Millers,Rivers,Katies,Rockmans,and Noni B,pleaded guilty in the Downing Centre Local Court to underpaying 223 of its workers.

The fashion giant which owns Rivers,Katies,Rockmans and Noni B underpaid long service leave for more than 200 workers.

The fashion giant which owns Rivers,Katies,Rockmans and Noni B underpaid long service leave for more than 200 workers.Supplied

It is the largest number of offences prosecuted simultaneously in NSW for long service leave underpayments,and comes ahead of aplanned expansion ofleave entitlements through a portable scheme for gig,disability,home care and other vulnerable on-demand workers.

Portable long service payments already exist for construction and contract cleaning workers in NSW.

However,in a key pre-election promise,Labor committed to expanding it to other industries including disability,home care and community service employees,which would give tens of thousands of workers access to leave entitlements.

The prosecution saw Mosaic Brands issued with a $29,000 fine on May 19 – a record in NSW for underpaying long service leave entitlements – with the court finding that the offences were too serious and too widespread for there to be no penalty imposed.

The court found that while the underpayments were not deliberate,they occurred due to a lack of care and diligence relating to the retail group’s payroll obligations.

As a result of the prosecution,the fashion giant agreed to engage consulting firm Deloitte to conduct a full audit of its compliance with long service leave legislation.

Minister for Industrial Relations Sophie Cotsis said the NSW Employee Relations Inspectorate uncovered “systemic underpayments arising from payroll system errors” when it conducted an investigation into Mosaic Brands Limited and its subsidiaries.

“The NSW government is committed to standing up for workers and investigating businesses who are short-changing their staff,particularly at a time when so many individuals and family are doing it tough,” Cotsis said.

“The criminal court’s ruling is a reminder to employers,big and small,that they should be making sure their employees are receiving their full entitlements.”

Cotsis said she wanted to acknowledge that Mosaic Brands Limited and its subsidiaries committed to “ensuring they pay long service leave correctly”.

Mosaic Brands Limited was “cooperative during the routine investigation and during the prosecution in complying fully with inspectorate requests and also in entering a plea of guilty at the earliest opportunity”,she said.

“Long service leave applies to most NSW employees who are full-time,part-time or casuals. It is up to the employer to conduct their own internal compliance reviews on a regular basis to make sure they are paying long service leave correctly,” Cotsis said.

A spokesman for Mosaic Brands said:“The court was clear in highlighting what happened was not deliberate,and that the company cooperated fully to swiftly rectify the issue.”

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Alexandra Smith is the State Political Editor of The Sydney Morning Herald.

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