Australia’s largest speciality fashion retailer has faced a A$29,000 (US$18,875) fine for underpaying its workers for long service leave.
Mosaic Brands, which has 1,110 stores nationally, including Millers, Rivers, Katies, Rockmans and Noni B, pleaded guilty to 324 offences in Downing Centre Local Court. The court issued the fine on Monday.
This is the record number of offences prosecuted simultaneously in New South Wales for long service leave underpayments.
In the Downing Centre Local Criminal Court on Monday, the Magistrate found that systemic underpayments of long service leave to 223 workers were not deliberate as they arose from payroll system errors.
However, the magistrate concluded that it is impossible not to impose any penalty because the offences were too serious and widespread.
Industrial Relations Minister Sophie Cotsis used the case to call for a renewed focus on compliance to support a “massive expansion” of long-service leave entitlements to tens of thousands of workers.
“The NSW government is committed to standing up for workers and investigating businesses who are shorting changing their staff, particularly at a time when so many individuals and families are doing it tough,” Cotsis said in a media release on Tuesday.
She said the court’s ruling was a reminder to employers, big and small, that they must ensure their employees receive their full entitlements.
“Long service leave applies to most NSW employees who are full-time, part-time or casuals,” Cotsis said.
“It is up to the employer to conduct their own internal compliance receives on a regular basis to make sure they are paying long service leave correctly.”
Calls To Expand Long Service Leave
It comes as the New South Wales Labor government looks to overhaul conditions for the gig, disability, home-care and other precarious workers through a portable leave scheme.
Long service leave is a period of paid leave granted to employees in recognition of a long period of service to an employer and is available to workers employed with one employer for 10 years.
Portable long-service leave, which was introduced during the 1970s following negotiations between employers and unions, allows workers to accrue long-service leave benefits, regardless of how many employers they have worked for.
Traditionally, only construction workers are entitled to the portable scheme due to the project-based nature of the industry.
However, under a Labor-led upper house inquiry into the future of work by the Minns government, the portable leave scheme will be expanded to more occupations within the gig economy. The inquiry also recommended raising the minimum wage and expanding paid leave for gig workers.
In March, the Australian Capital Territory also passed a bill that will grant long service leave to workers in the hair and beauty, accommodation, and food services industry.
Potential Consequences For Small Businesses
However, some have raised concerns that the expansion of the portable leave scheme will be a hit to small businesses at a time when the cost of living is worsening.
ACT Shadow Minister for Business Leanne Castley argued during a debate on the bill that small businesses are unable to afford the price coming with expanding long service leave.
“[Small businesses are] the heart and soul of our local community,” she said, the Daily Telegraph reported.
“Largely unsuspecting (businesses) will all be hit by this 1-2 per cent levy on small business payroll when interest rates and input costs are rising and economic growth contracting.”
“This will cause job losses and business closures, all while many small businesses are still recovering from COVID-19.
“Given the transient nature of employment in these industries, it is doubtful that many workers will ever see any benefit.
Meanwhile, Australian Hotels Association ACT branch general manager Jason Hawketts told The Daily Telegraph that the government has not gathered enough of the correct data and responses from all sides.
