‘Extremely sorry’: The Iconic finds a further $201,000 in underpayments

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Online retailer The Iconic has uncovered nearly $201,000 in additional underpayments in the midst of upgrading its payroll and HR systems, after having already been found to have underpaid hundreds of casual staff more than $1 million between 2013 and 2019.

The fashion and lifestyle retailer, which has cut 116 jobs this year, back-paid 800 current and former staff in 2022 after two audits of its accounting systems found payroll errors totalling $1.38 million.

The Iconic has uncovered more underpayments in the process of upgrading its HR and payroll systems.

While all those underpayments have now been rectified, The Iconic engaged independent external auditors to conduct payroll checks that identified 551 casual staff had also been underpaid a total of $200,937 in wages, interest, super and lost earnings between 2020 to 2023.

“The Iconic deeply regrets that the issue has occurred,” said a statement from the retailer.

“We take our obligations very seriously, and we believe that our new payroll and human resources systems as well as our ongoing vigilance in reviewing and upgrading our payroll processes and data minimises the risk of this happening again.”

The company has self-reported the additional underpayments to the Fair Work Ombudsman, established a dedicated team to provide affected staff with information and support, and is in the final stages of remediation, it said.

In an email to affected workers on Friday, The Iconic’s new chief executive Jere Calmes said the business “extends our sincerest apologies” to staff impacted by the “misapplication of the relevant awards”.

Some staff were overpaid, but will not be asked to pay back the funds. Other underpayments were less than $1. “However we have committed to paying all impacted ICONITEs a minimum of $50 as a gesture of good faith,” Calmes wrote.

Late last year, several staff came forward to this masthead to detail their experience working for a company that they said had a culture of not listening to concerns about pay, conditions, and recognition for jobs performed. Staff described working in extremely hot or cold conditions, with models photographed wearing summer clothes in winter needing their images retouched as their skin turned “blue” from the cold.

Australian label Bec & Bridge cut ties with the retailer after accusing it of copying its designs. Its founders Becky Cooper and Bridget Yorston ultimately chose to “exit quietly” from The Iconic rather than pursue further legal action.

Job cuts

The Iconic made a total of 116 roles redundant this year as part of an organisational restructure. A round of redundancies in February eliminated 69 jobs and was followed by a further round in August, which has not been made public until now, that resulted in 47 job losses.

“Our people are always our biggest priority, and we were acutely focussed on limiting the impact on our team members throughout this process, while considering what is strategically required to evolve our operational effectiveness,” a spokesperson said.

The Iconic was established in 2011 and is part of the Global Fashion Group, which is listed on the Frankfurt Stock Exchange. While the brand is profitable as a whole, making €211.8 million ($353 million) in the 2022 financial year, it has never turned a profit in Australia, where it hires around 1000 employees.

Documents filed with the corporate regulator show a loss of more than $11 million for the 2022 calendar year in Australia, more than double the $4.7 million loss in 2021. Meanwhile, sales revenue improved, coming in at $716.9 million, compared to $620.2 million the year before.

Jere Calmes took over as chief executive after Erica Berchtold announced she was leaving after four years to take the top job at Best & Less, but the discount chain ditched her from that role three months before she was expected to begin.

with Melissa Singer

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