Made Establishment, of which celebrity chef George Calombaris is a founding member and current shareholder, has admitted to underpaying staff more than $7.8 million in wages and superannuation between 2011 and 2017. Calombaris served as a Made Establishment director from 2008 to 2018.

The group’s restaurants involved in the underpayments include Gazi, Hellenic Republic restaurants in Kew, Williamstown and Brunswick, and the recently closed Press Club. The underpayments also extend to some of the Jimmy Grants group of restaurants, which shares directors and shareholders with the Made group. Jimmy Grants Pty Ltd failed to correctly pay staff, particularly casual employees, at the correct classification under the restaurant industry award.

The Fair Work Ombudsman first issued a letter of caution to Made Establishment in 2015 relating to the underpayment of one worker at Press Club. Made Establishment then self-reported and back paid workers $2.6 million in 2017. Following an investigation by FWO after the $2.6 million payment, Made Establishment has now back paid 515 current or former employees at Press Club, Gazi and Hellenic Republic totalling $7,832,953 to date. Nine Jimmy Grants employees were back paid $16,371.

“All current Made team members have been correctly classified, and all entitlements verified as owing to current and past employees have been calculated and paid, with a handful of claims now being finalised,” said Made Group chief executive officer Leigh Small in a statement.

Fair Work Ombudsman inspectors found the underpayments occurred because of a failure to correctly apply annualised salary arrangements, and by failing to check workers on annual salary arrangements were paid for overtime and penalty rate hours worked.

Made Establishment has entered into a court-enforceable undertaking (EU) with the Fair Work Ombudsman. It will make a $200,000 contrition payment to the Commonwealth Government’s Consolidated Revenue Fund. Until the EU expires in 2022, the Made Group must self-fund external auditors to check workers’ pay and conditions. As part of the EU, Calombaris will complete speaking engagements on the importance of workplace compliance.

“The Court-Enforceable Undertaking commits Made Establishment to stringent measures to ensure that current and future employees across their restaurant group are paid correctly,” Fair Work ombudsman Sandra Parker said in a statement. “Made’s massive back-payment bill should serve as a warning to all employers that if they don’t get workplace compliance right from the beginning, they can spend years cleaning up the mess.”

“We apologise to all our affected team members, past and present – as it is our people that make our restaurants great, and it is our priority to ensure all of our employees feel respected, rewarded and supported in their roles,” Calombaris said in a statement.

Made Establishment closed its flagship restaurant Press Club at the end of June. It will re-open as Elektra in late July.

This article was updated on July 18, 2019 at 2.11pm