Earlier this week it was announced that the restaurant empire of former MasterChef judge George Calombaris was being placed into voluntary administration.
The immediate closure of 12 restaurants, which include the Jimmy Grants chain, Hellenic Republic and Elektra, means there are now 400 staff out of work and the remaining venues in the MAdE Establishment Group are at risk of closing too.
“The last few months have been the most challenging I have ever faced,” George wrote in a statement on Instagram. “I am so sorry all our collective efforts have not proved to be enough. I’m gutted that it’s come to this.”
Last year Calombaris found himself at the centre of a scandal when it was reported the hospitality group had unpaid staff to the tune of $7.83 million. He lost a lucrative contract with WA Tourism as a result of the scandal, as well as his judging role on MasterChef (along with Matt Preston & Gary Mehigan).
On Wednesday it was reported that Craig Shepard, from the administrators KordaMentha, described the wages scandal as “a big factor” in the demise of MAde.
Despite rebranding a number of the venues in the aftermath, they weren’t able to attract customers. Patronage fell by 50% which is significant.
A number of industry figures have blamed the collapse of the group on the Fair Work Ombudsman’s ‘heavy-handed name and shame’ approach to the issue of underpayment. The unions have also been blamed for stirring controversy around wage theft.
Who killed George Calombaris' empire? https://t.co/JFkmrCGuL6
— Patrick Durkin (@patrickdurkin) February 11, 2020
There is no doubt that a business of this scale going under is a disaster. For everyone who has lost their job – or who might soon lose their job – it’s a debacle.
But that’s not to say consequences flowing from a systemic business failure, in which employees weren’t paid legally, is foul. The fact MAde isn’t the only hospitality group to be found guilty of underpaying staff doesn’t change that.
In a different take, @The_AiGroup CEO Innes Willox claims unions should “bear much of the opprobrium” for Calombaris collapse and loss of jobs. Claims unions relentlessly overinflated employee underpayments and branded companies as “thieves”. @australian https://t.co/Ka2nKhd6Gf
— Ewin Hannan (@EwinHannan) February 11, 2020
Whether the response from customers, to vote with their feet and wallets and avoid these venues, was exacerbated by the Fair Work Ombudsman or unions isn’t really the point. They didn’t cause the problem.
But the problem they revealed, employers not paying their staff appropriately, is evidently something plenty of Australians aren’t willing to countenance. And the collective impact has been significant.
— Ben Schneiders (@benschneiders) February 11, 2020
It is a reminder that as consumers we do have power. And, without expressly wishing any business into administration, it is worth remembering when considering the problems we see and don’t like. As consumers we have power in our wallets and we shouldn’t be afraid to exercise it.