When I was a young articled clerk at Freehills I spent a few months working in the most employer-friendly industrial relations team in Australia.
On one occasion I was asked to serve a legal document to a high profile union. When I walked in it felt like there was a significant chance of bodily harm (there wasn’t).
The unions hated the employers and their lawyers, and the lawyers hated the unions.
In reality, the lawyers who charged $700+ per hour desperately needed the unions (without them, they’d have no clients). Similarly, the unions needed the lawyers to justify their own bloated administrative costs and to create an enemy to justify their union dues.
I was reminded of this utter futility with the sad unravelling of George Calombaris’ MAdE Establishment restaurant empire.
The issue started back in 2017, shortly after Radek Sali’s Light Warrior fund bought a stake in MAdE. Sali’s team discovered that the business had underpaid staff by $2.6 million (or about $16,000 each).
The company self-reported, so it’s possible that the staff never realised they were being underpaid. Fast forward to 2019 and the Fair Work Ombudsman claimed that the underpayment was actually $7.8 million. The business was was required to make a further $200,000 contrition payment.
The problem was, unlike other businesses found underpaying staff, Calombaris’ high profile (as co-host of the top rating MasterChef program since 2009) meant that he was easy fodder for the media, with a union-led campaign targeting the celebrity chef.
After the Fair Work finding, United Voice national secretary Jo-Anne Schofield claimed “we are truly shocked at the full extent of wage theft at MAdE Establishment … if someone deliberately took $1,000 out of someone else’s bank account, there would be a high likelihood of a criminal conviction for theft”.
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“But when you’re a multimillionaire restaurateur/celebrity chef you can take $7.83 million in wages from your workers and get away with a ‘contrition payment’.”
Australian Council of Trade Unions head Michele O’Neil also piled in, stating that “wage theft is systemic across entire industries”.
“We need harsher penalties, directors to be held responsible for their actions and rights for unions to access workplaces and ensure that workers are being paid correctly.”
Calombaris suddenly became a robber baron.
That narrative was slightly strange. MadE turned itself in. It was never caught or even accused before that time. And given the complexity of the award and penalty system, it’s possible it never would have been caught.
But what did the union and media pile on achieve?
Well, last week, MAdE was forced to place virtually all of its restaurants in administration after patronage dropped by 50%. And the TV chef’s celebrity career seems all but over, having first left MasterChef over a pay dispute and now receiving a ton of bad publicity.
No one should be underpaid, especially those who aren’t being paid much in the first place.
But the public demonisation of Calombaris by the unions meant that 400 workers — some of whom may pay union fees to have their standard of living improved — now find themselves unemployed. Utterly futile indeed.
Adam Schwab is a former lawyer, company director and angel investor.