His kitchen, new rules: Calombaris to reimburse underpaid staff within weeks

George Calombaris.
George Calombaris. Photo: Guy Lavoipierre

George Calombaris' hospitality empire says it will reimburse underpaid staff within a month, following criticism of the compensation scheme which included social media attacks on the celebrity chef.

Fairfax Media revealed last week that Mr Calombaris' company, Made Establishment, had told former staff they could be forced to wait until June 2018 before receiving back-pay for missing wages and entitlements.

Last month Made Establishment chief executive Troy McDonagh told former employees that the deadline would be extended by 12 months because "the total number of individual investigations we have taken to properly and accurately assess each claim is substantially greater than what we first anticipated".

The delay had frustrated the Fair Work Ombudsman, and sparked a campaign of abuse against Mr Calombaris, which included signs posted around Melbourne's CBD with a photograph of the Masterchef star under a headline which read: "Does this guy owe you money?".

The image has been widely circulated on social media.

However, in a surprise announcement on Monday night, the company announced it would settle all outstanding claims with former workers by October 13.

"We understand the frustration of those still waiting," Mr McDonagh said in an email to staff.

"As I said at the outset, we are committed to reconciling and settling your claim by Friday, October 13, 2017 and we will continue to assess and process new claims received after this date within four weeks of receiving the inquiry."

Made Establishment reported itself to the Fair Work Ombudsman in April 2016, after an internal audit revealed significant payroll discrepancies throughout its restaurant chain.

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The company said it had spent $2.6 million to compensate 162 current employees.

At the time, former staff were also urged to submit claims, which were supposed to be investigated and paid out by June 30, 2017.

The company blamed the payroll bungle on "historically poor processes" which had caused some staff to be overpaid, while others were not paid their entitlements under the award.

George Calombaris (right) and business partner Radek Sali.
George Calombaris (right) and business partner Radek Sali. Photo: Paul Jeffers

The company was first alerted to underpayment problems by the Fair Work Ombudsman in 2015, but the issues were not investigated properly until Mr  McDonagh was named as Made Establishment's chief executive in October last year.

Mr McDonagh was appointed chief executive after Light Warrior, the private investment company of former Swisse Wellness chief executive Radek Sali, became a significant shareholder in Made Establishment.

The underpayment scandal caused major ructions with Mr Sali, who told Fairfax Media that he was "prepared for a few potholes in the books" when he invested, but was not made aware that some staff had been underpaid for up to six years.

In July, Mr Sali become the majority shareholder in the embattled hospitality empire after buying a 23 per cent stake from Mr Calombaris' long-term business partner George Sykiotis.