George Calombaris told staff last week that ''I am so sorry we have messed up''. Credit:James Brickwood The allegations will be investigated by the Fair Work Ombudsman, which has confirmed it was "working through the issues we first identified and raised with the business in 2015 to ensure compliance has been achieved". One long-serving senior employee of Made Establishment said the company put people on salary "at the earliest possible opportunity and then [made] them work a 50-hour week with no overtime. That gets the average wage down to under the award. Managers were always rostered on a Sunday to avoid penalty rates," the former employee said. Mr McDonagh emphatically denied the underpayments had been the result of any deliberate plan to cut costs. "I can understand why [those making allegations] thought that this could be pre-planned, but let me say this, of the current 162 staff on the team that were affected, if I look at the way they were paid, 80 were overpaid and 82 were underpaid, so I can confidently say this was a symptom of errors of processes, not any intent or strategy."

Calombaris flanked by fellow MasterChef judges Gary Mehigan (left) and Matt Preston. Mr McDonagh confirmed the Fair Work Ombudsman had received a complaint regarding underpayment as early as 2015. "Let me be clear, that was one team member for one restaurant. Fairfax Media is aware of one chef at Hellenic Republic in Brunswick who was underpaid almost $100,000. Credit:Rebecca Hallas "We understand there were notices from Fair Work at that time, but part of the modern award is the need to fulfil a reconciliation, and that is what we did when I came in," Mr McDonagh said.

Staff were told in an email that by the end of last week more than 30 former workers had been paid the money they were owed. Calombaris fuelled a national debate in 2012 about the viability of penalty rates. Credit:Simon Schluter MasterChef star Calombaris has said he was devastated by "discrepancies with the payroll process". "I am so sorry we have messed up and let you down on a fundamental, which is to ensure our people are paid what they are entitled to," he said in an email to staff on April 3. Illustration: Matt Golding

Last week, as a carefully crafted public relations campaign was rolled out, Made Establishment's board of directors said half of the impacted staff had received a higher base salary than they should have. The company said it would not seek to recoup any salary overpayments. But several company insiders have branded the claims of overpayment as "misleading" and "bullshit". "Those who got more than the award were either expected to work enormous hours, or got more because they were good or took on more responsibility," a former waiter said. "For them to say we can keep it [the money], as if it's some kind of gesture of goodwill, is total bullshit." A former staff member at Hellenic Republic said some chefs regularly worked up to 80 hours a week. "It is an industry-wide problem, where people are expected to work longer hours and not get paid. Chefs get the brunt of the bad treatment, and the number of hours worked are almost considered a badge of honour," the woman said.

Fairfax Media is aware of one chef at Hellenic Republic in Brunswick who was underpaid almost $100,000, while another was owed $44,000. According to Made Establishment, the average reimbursement to staff was about $16,000. Another former employee said she intended to pursue a wages claim against Made Establishment. More than 50 former staff from Calombaris' stable of restaurants are understood to have applied for compensation since news early last week of the payroll problems. "From my perspective, I find it very hard to believe it was accidental," she said. "I just don't know how you miss something like that. In my position, I dealt with payroll all the time. They seemed really switched on. The funny thing was, we all had timesheets, but our payslips never reflected those timesheets. I have checked again today and there are no overtime hours on them."

ACTU president Ged Kearney said underpayment on this scale was so widespread across the hospitality and retail sectors that it had become a business model for many employers. "If the allegations against Mr Calombaris prove correct, then he has profited from the exploitation of some of the most insecure workers in Australia while spending millions on Toorak real estate. "His track record as an employer is also tarnished by his public opposition to penalty rates," Ms Kearney said. In 2012, Calombaris fuelled a national debate about the viability of penalty rates, when he complained that some of his restaurants were unprofitable on a Sunday because he was required to pay staff up to $40 an hour. "The problem is that wages on public holidays and weekends greatly exceed the opportunity for profit.