DICK SMITH EMPLOYEES SHORT-CHANGED $2M

Written on the 4 February 2016 by Nick Nichols

DICK SMITH EMPLOYEES SHORT-CHANGED $2M

DICK Smith Holdings (ASX:DSH) appears to have short-changed staff to the tune of $2 million over the past six years, according to company receivers who announced a swag of job losses for the electronics retailer.

The receivers from Ferrier Hodgson have revealed that the shortfall has come from holiday leave loadings for company staff dating back to 2010.

"Based on our investigations to date, we understand that up to 3200 current and former employees of the Australian business may have been underpaid their annual leave loading entitlements, potentially dating back to 2010," says receiver James Stewart.

He says the shortfall, totalling about $2 million, solely relates to Australian employees and not those from New Zealand.

"The underpayment of entitlements appears to reflect an incorrect application of the relevant industrial award," Stewart says.

The receivers have alerted the Fair Work Ombudsman and the Shop Distributive and Allied Employees' Association (SDA) to the matter. Both Fair Work and the SDA have been contacted by Business News Australia for comment.

A spokesman for Fair Work confirms notification of the matter from Ferrier Hodgson.

"We are now making our own independent inquiries with a view to working co-operatively with the receivers, the SDA and those workers who have been impacted," the spokesman says, adding that it was inappropriate to comment further at this time.

Receivers say they are working through other records to confirm employees have been paid in accordance with award entitlements.

Any employee entitlements will rank as priority creditors ahead of the secured creditors.

Meanwhile, the receivers plan to cut 22 support jobs from Dick Smith Holdings' head office as they restructure the business ahead of a planned sale.

"The ongoing restructuring of the business is a necessary step in creating a leaner organisation going forward, while our discussions with interested parties continue," says Stewart.

The restructure also has claimed the job of group CFO Michael Potts who joined Dick Smith in September 2013, just months ahead of the company's public float.

The receivers have appointed Bert van der Veld as his replacement. Van der Veld has 25 years' experience in retail, including stints with Woolworths, Eldorado Company and Metcash.

Potts' departure comes on the heels of CEO Nick Abboud quitting in January.

Dick Smith was placed into voluntary administration on January 4 with receivers since revealing that the company has secured debts of $140 million and unsecured debts of $250 million to trade suppliers.

At the time, the electronics retail group operated 393 stores in Australia and New Zealand under four brands, Dick Smith, Electronics powered by Dick Smith, Move and Move by Dick Smith.


Author: Nick Nichols

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