👉 Background: Lovisa started back in 2010 as a fast fashion jewellery chain with budget-friendly bling. Over the past 14 years, it has grown quickly to over 600 stores around the world, including listing on the ASX in 2014 and now worth a casual $3.2 billion.

‍👉 What happened: Behind the glitz of Lovisa, things might not be so golden after a class action lawsuit has been filed by its employees for allegedly breaching workers’ rights. This includes paying employees the wrong base rate, not paying staff for attending training, as well as forcing staff to perform duties before or after their rostered shift.

‍👉 What else: Over 300 employees are alleging breach of their workplace rights - mostly young women in high school and university. If this lawsuit is successful, it could have a significant impact on Lovisa’s financial results…and reputation.

What's the key learning?

💡When a company is hit with a workplace lawsuit, the implications can extend far beyond legal fees. Class actions result in pretty hefty settlements that can drain company resources.

💡As an example, Woolworths was forced to repay $571 million after underpaying staff in 2021, and this had a significant impact on its profit for that year. There are also serious implications, beyond direct financial losses including ruining of the brand trust - particularly if it’s so public in the media.

💡This lawsuit isn’t the first time Lovisa has been criticised for its workplace practices based on its employer rating on Seek which is 2.7/5, 2.4 / 5 on Glassdoor and just 1.6/5 on Product Review.