Popular Melbourne bakery, All Are Welcome, has left its staff in a lurch by owing them a substantial amount of money. The bakery’s employees are collectively owed $243,000 in superannuation and an additional $125,000 in leave entitlements. This dire situation arose after the bakery went into voluntary administration earlier this year due to accumulating over $1 million in debts. Despite this financial turmoil, the owner managed to repurchase the business under a new entity.
One former employee shared their concerns saying,
“I don’t have confidence that I’m going to see that money,”
reflecting the anxiety felt by many affected workers who fear they may never receive what is rightfully theirs. Discovering the shortfall in their super payments was unsettling for many employees. Despite regular pay slips indicating super contributions, these were not reflected in their accounts over several months.
The lack of communication from management added to the frustration of employees who were blindsided by the situation. The decision to withhold super payments was explained as a cash flow measure during tough financial times for the business. However, this explanation lacked clarity and failed to provide a timeline on when staff could expect their overdue payments.
Furthermore, it was revealed that while struggling financially, the director lent himself over $235,000 through his family trust as an alternative form of remuneration. Amidst mounting concerns and uncertainties surrounding outstanding payments, there is a glimmer of hope with talks about implementing ‘payday super’.
“Payday super means your super paid on the same day as your wages,”
explains Mary Delahunty from ASFA. This system would ensure that all workers receive their super contributions simultaneously with their salaries, minimizing discrepancies and delays often faced by employees like those at All Are Welcome bakery.
However, preparing for such a transition requires time and resources which some argue are lacking before implementing payday super across all businesses by 2026. Richard Webb from CPA Australia highlights potential challenges stating that rushing through this initiative could lead to confusion and compliance issues within organizations.
While payday super promises more efficient processes benefitting both employers and employees alike, there are logistical hurdles that need addressing before its full-scale implementation. Despite these challenges, advocates believe that ensuring timely payment of superannuation will ultimately result in better retirement savings for millions of workers.
