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Fighting For Australian Workers Who Have Had Their Wages Stolen By Their Boss
Five-star Shangri-La Hotel Underpays 199 Workers $3 Million

Five-star Shangri-La Hotel underpays 199 workers $3 million

The five-star Shangri-La Hotel has admitted underpaying 199 workers more than $3 million.

Despite the size of the wage theft, the Fair Work Ombudsman will not commence legal action against the company behind the hotel.

Instead, it has entered into an Enforceable Undertaking (EU), which effectively lets the Shangri-La off the hook.

Five-star Shangri-La Hotel underpays workers

Lilyvale Hotel Pty Ltd operates the Shangri-La hotel located at The Rocks in inner-Sydney.

An audit found the company underpaid 199 cooks, chefs, food and beverage attendants and porters, in addition to purchasing, engineering, room service and front office staff.

The wage theft happened as a result of the Shangri-La paying the workers annualised salaries.

The salaries failed to cover overtime rates, penalty rates for weekend, night and public holiday work.

The company also failed to pay meal break penalties and annual leave loading entitlements.

The underpayments totaled $3.09 million with individual amounts owed to workers ranging from $16 to $119,447.

The Shangri-La also breached workplace laws relating to rostering, record-keeping and providing new employees with a Fair Work Information Statement.

Five-star Shangri-La’s Enforceable Undertaking

Instead of commencing legal action, Fair Work has entered into an EU with the Shangri-La.

Under the terms of the agreement, the hotel will calculate and back-pay amounts owing to every affected employee, plus interest and superannuation, within the next four months.

However, some affected former staff will be hard to find.

They worked at the Shangri-La on skilled worker, working holiday and student visas from countries such as including Thailand, India, Burma, South Korea, the Philippines and the UK.

Under the EU, the hotel will also make a $90,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.

The company is also required to formally apologise to staff and commission workplace relations training for relevant staff.

They must also offer all operational non-managerial employees the option to be remunerated on a weekly or hourly basis, rather than an annualised salary.

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“Fair Work finally makes an effort recovering $148 million in stolen wages”

Wrong message

Industrial advocate Miles Heffernan said EUs send the wrong message.

“The wage theft in this case is significant and deserves court action,” he said.

“Instead, the regulator has offered a cosy agreement that effectively lets this multi-million dollar company off the hook.”

Business can’t ‘set and forget’ annualised salaries

Fair Work Ombudsman Sandra Parker said an EU is appropriate in this case because the hotel had cooperated and committed to rectifying the wage theft.

She said underpayments resulting from insufficient annual salaries is a persistent problem for workers.

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers. 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,” Ms Parker said.

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