Australian jewellery chain Lovisa has come under fire for allegedly withholding wages and breaks from staff, and encouraging unpaid work. The allegations have been put forward by law firm Adero Law, which is investigating the claims on behalf of casual, part-time and full-time employees of Lovisa, and if they are found to be true, may pursue a class action to retrieve compensation. Concurrently, Lovisa’s newly minted CEO Victor Herrero, who joined the business last year, has reportedly signed
igned onto a $68 million three-year contract – which would make him the second highest paid retail executive in the country, according to the Australian Financial Review – amid a period of impressive growth for the business. In FY22, Lovisa more than doubled its net profit to $58 million, up from $27.7 million a year prior.
Lovisa staff speak up
Allegations from staff are coming thick and fast after former employee Marissa Tukuafu shared her experiences working at Lovisa on Tiktok and went viral. In her videos, she called it a “traumatic” place to work.
“I was easily coming into work one hour early every morning and staying two hours after, working through lunch, we didn’t have enough staff, and the workload was quite intense,” Tukuafu told The Daily Telegraph.
“I knew it was at the point where I had to leave when I had to get an ECG [electrocardiogram] put on due to constant heart palpitations, and while I was getting the monitor on I was called to come in.”
A current Lovisa employee, who wished to remain anonymous, told Inside Retail they have been routinely asked to stay back after their shift is finished to ensure the store is clean for the next day, and that long-time employees know to avoid the final shift of the day as it carries an expectation of unpaid cleaning time.
“I worked an eight-hour shift to take the load off of my manager because I knew she had been stressed – it’s Christmas – and then was asked to mop and clean the store after my shift ended,” the employee said.
“There’s a high turnover rate, because people get frustrated. There’s no recognition or appreciation of good work, but their expectations are high.”
While the employee said they had not been denied breaks, they have experienced irregular breaks, wherein their break times were not allocated, and they were given only a few minutes’ notice when they were expected to go.
Inside Retail emailed Lovisa with the details of these allegations, but at the time of this writing, the business had not replied.
The impact social media has had on the ability for staff to share such details shouldn’t be discounted, and may play a role in getting many businesses to fix up improper work practices, Corporate Dojo’s Karen Gately told Inside Retail.
“It’s a sad reality that some employers fail to do the right thing, until they have compelling reason to do so,” Gately said.
“Social media provides a very public platform through which people can now share their grievances and bring attention to workplace issues that would otherwise have been contained to a much smaller audience. While this undoubtedly creates challenges for employers, there is no denying the powerful tool social media can be when injustices occur.”
Class action could be on the cards
There has been a raft of underpayments in the industry over the past few years, from Woolworths and Coles to Super Retail Group and McDonald’s. In many cases, it has been attributed to the complicated nature of the national retail award.
“It’s a lot for the retail industry to manage,” University of Newcastle lecturer in law Mirella Atherton told Inside Retail.
“People of different ages have different entitlements, there’s whether someone is on a full-time contract, or part-time or casual, and the differences that brings in terms of pay and break allotments. It must be an enormous workload behind the scenes to get everybody correctly paid.”
Bernie Smith, NSW secretary of retail union SDA, told Inside Retail that complex industrial relations (IR) laws shouldn’t get in the way of businesses paying their staff, and that it is disappointing to see another business failing to provide due entitlements.
“Whether you are on wages covered by an agreement or a salary it’s pretty simple – all time worked must be paid and all breaks must be taken,” Smith said.
“Cases like this are a reminder of why further IR reforms are needed to make underpayment claims quicker and less legalistic to resolve for workers. It’s so important to ensure that workers owed money can receive their entitlements quickly, and without losing large portions of what they are owed in class action legal fees and finder’s costs.”
If Adero Law is able to prove that Lovisa’s alleged actions are true, the business could face an opt-out class action covering staff that worked for the jewellery chain from 2016 onwards – potentially thousands of staff members.
According to Atherton, class actions are ideal for situations involving multiple claimants, especially those that are younger and less likely to take legal action themselves, but logistically they can be difficult to see through to the end.
“Firstly, we need to judge whether there is any wrongdoing – has someone been harmed [financially], and how significant is that? And then, can we recover that damage?” Atherton said.
“There’s lots of factors, and class actions can stall: sometimes they’re settled out of court, and sometimes they can come to an agreement. There have been class actions that have been very successful and have recouped millions of dollars in payouts for their clients – I wouldn’t go that far in this case, but I’d be thinking about what are the prospects of recovery.”