Employees at major Australian fashion retailer The Iconic have accused the e-commerce giant of poor pay, a seven-year underpayment issue and horror working conditions that saw staff freeze through winter and sweat in summer.
Current and former employees who worked at the company’s Sydney production hub in the inner-city suburb of Alexandria say the space is notorious for drastically fluctuating temperatures.
A former employee of the company — one of the country’s largest fashion retailers — told news.com.au that the building’s fans were inadequate at cooling in summer, while small space heaters used in winter would cause the power to short circuit if too many appliances were plugged in at the same outlet.
According to a series of explosive claims by workers who spoke to the Sydney Morning Herald, “several sources” said that plummeting temperatures in winter meant models’ hands often turned “blue” during photo shoots.
Messages between employees showed one person asking: “I also just noticed with this model, the skin tones on her hands are turning a different colour because of the cold. Would you guys be able to fix it to match the rest of her arm please? Thank you”.
In a statement to news.com.au, The Iconic said that Occupational Health and Safety audits and workplace inspections showed that the temperatures at all of the business’ facilities complied with thermal comfort standards as required by Safe Work NSW.
In response to recent feedback on the temperature, The Iconic said they would be “proactively installing” infra-red heating in their Alexandria warehouse, with the installation due to be completed by January.
“We also ensure that both our employees and models have easy access to heat lamps and warm clothing should they request it at any point,” the spokesperson said.
$1.38 million underpayment
In 2022, the company self-reported an underpayment issue of more than $1.43 million.
Emails between The Iconic’s CEO, Erica Berchtold and the 814 current and former staff who were impacted said that the discrepancies were made between October 1, 2013 to January 12, 2020, and occurred due to the “misapplication of the relevant awards”.
Working as a casual in The Iconic’s customer service department during that period, Jennifer said communication between Ms Berchtold and employees “was adequate”.
While she was owed around $50, news.com.au has been told of underpayments which range from a few hundred to $4000.
“She (Ms Berchtold) personally apologised to us on the call, and we received a follow up email after the call,” adds Jennifer.
“They sent emails and we had a follow up call with Erica, the CEO, and a few other key people in the company.”
Wage discrepancies were eventually resolved through Deloitte, and The Iconic says the company has repaid more that 95 per cent of the amount owed. The pay back of funds was also returned at an interest rate of 5.5 per cent, and included superannuation contributions and lost earnings on superannuation.
Forty two former employees have yet to be successfully contacted by The Iconic, in regards to outstanding funds totalling $54,991. However workers will be able to access the money through the Fair Work Ombudsman via the Commonwealth’s Consolidated Revenue scheme.
A spokesperson for the shopping giant said: “The Iconic deeply regrets that this occurred and has apologised to all of the employees involved”.
‘Notorious’ for poor pay
One former employee told news.com.au that the company is “notorious” in the fashion industry for wages that are under industry standards.
“Company communication about ‘putting people first,’ or talk that ‘people are our greatest asset,’ seem ironic when your pay doesn’t reflect this,” said Jennifer*.
When it came for her to pursue her next role at another company, she said she had to “lie about my salary,” because there was “no way I would have survived” if I hadn’t.
In a statement to news.com.au, The Iconic said it “regularly benchmarks its pay scales against comparable roles,” however Jennifer disagreed with this.
“People stick around because they know that if you have The Iconic on your resume, you’re almost guaranteed a role in the fashion industry anywhere in Australia,” she said.
“Obviously not a good reason to pay below industry standards, but they’re able to do it because they know people will stay.”
The Iconic is one of Australia’s largest online retailers and sits under the parent company of Singaporean e-commerce giant, Global Fashion Group (GFG).
In the latest publicised figures dated back to 2018 – the company reported an revenue of $370.5 million to the Australian Securities and Investments Commission (ASIC), and a net loss of $18.3 million.
*Names changed
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