Fashion retailer Uniqlo has apologised to current and former employees and is working to organise back-payment after discovering underpayments in the group’s Australian operations to the value of $25 million.
The global casual-wear brand filed documents with the corporate regulator on Monday outlining its financial performance for the 12 months to August 31, 2022.
As part of its financial report, the company said it had made provisions of $21.1 million for the 2021 financial year and $3.9 million for its 2022 financial year after the business discovered the company did not meet all its obligations for certain past and present staff under the general retail industry award.
This led to those employees being owed additional wages and superannuation due to errors in calculation of their entitlements. The total provisions of $25 million include salary, interest and superannuation to be back-paid to staff.
A Uniqlo Australia spokesperson said on Tuesday that errors in the calculation of entitlement were identified after a specialist firm completed a review of the company’s systems.
“Our team is very important to us and we are sorry to all valued current and former employees impacted by these errors. We are working to rectify and remediate these issues, with back payment and interest, as quickly as possible,” the spokesperson said.
“We have reported the issue to the Fair Work Ombudsman and are presently contacting those affected.”
The underpayments occurred between July 1, 2015, and June 30, 2022, with about 7900 staff affected. The company is continuing to contact staff to organise back payment and interest.
“Since becoming aware of the issues, we have made improvements to our systems and processes to prevent this from happening again,” the Uniqlo spokesperson said.
The company’s financial figures suggest strong spending at Uniqlo as Australia emerged from pandemic lockdowns, with its reported revenue jumping by 26.4 per cent to $422.3 million in 2022.
While retail analysts are focused on the discretionary spending slowdown, Uniqlo joins the list of several retail brands that appear to have enjoyed a period of significant sales growth before spending softening.
Uniqlo’s profit for 2022 was $32 million, which compares with a “restated” profit of $3.6 million for 2021, once the impact of the underpayment provision is considered.
Uniqlo made its market debut in Australia in 2014 in Melbourne and has since expanded across the country, now operating more than 30 stores.
The business opened its first South Australian store last year and will open its first store in the ACT later this year.
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Source: Thanks smh.com