Underpaying Cotton On told to say sorry on Facebook

Retail clothing chain Cotton On which has been forced to backpay over 3,000 staff by the Fair Work Ombudsman, and was ordered to publish an official apology on its Facebook page, which CCI Lawyers principal Peter Vitale says is an example of the growth of social media in Fair Work undertakings.

The Ombudsman found the company failed to pay workers for attending training sessions, which were held outside of normal work hours.

An investigation conducted by Fair Work found the backpay came in at an average of $84.56 per employee, after the company failed to pay for training sessions conducted between February and December 2008.

The company voluntarily repaid the $278,000 last year, but has agreed to a number of undertakings.

The investigation found that even though Cotton On kept a record of dates and times of the training sessions, they failed to actually keep records of staff attendance. The company has agreed to an enforceable undertaking with the FWO, promising to keep in compliance with the Fair Work Act in the future.

It has also agreed to the following:

• To publish an apology to staff, signed by the chief executive, in all stores, on the website and on the official Facebook page.
• Human resources managers will undertake workplace relations compliance training within the next three months.
• A written report will be provided to the Fair Work Ombudsman each year for the next three years to show staff are being paid correctly, with identification of any proactive compliance measures.

The apology is already on the company’s Facebook page and states that: “Cotton On expresses its sincere regret and apologises to all past and present employees for failing to comply to its lawful obligations”.
“Furthermore, Cotton On gives its commitment that such conduct will not occur again and that it will comply with Commonwealth workplace relations laws,” the letter states, which is signed by chief executive Peter Johnson.

CCI Lawyers principal Peter Vitale says the case is a good warning for businesses, but also highlights how social media is playing a part in compliance with industrial relations laws.

“I guess it reflects the extent to which these sources of social media are being accepted as appropriate tools of communications for serious legal matters.”

“Clearly the Fair Work Ombudsman believes it has a big enough audience it’s going to achieve the objective of spreading their message and their enforcement principles.”

Vitale says there have been cases appearing before various courts in which evidence has been gathered using social media, and this is no different. He says Fair Work is recognising these sites have a huge impact, particularly as they target consumers directly.

“This is a logical extension of the way courts and authorities appear to be treating these forms of media. In a sense, they are becoming a replacement for the newspapers. You used to publish apologies in newspapers, and now these are moving online.”

The announcement comes just one day after the Australian Industry Group warned businesses to watch out for Fair Work decisions in order to keep up-to-date with how the new industrial relations laws are being interpreted.