The Fair Work Ombudsman (FWO) has initiated legal action in the Federal Court against Super Retail Group Limited (SRG Limited) and four of its subsidiaries for alleged underpayments of over $1 million. The action is being taken against SRG Limited and its subsidiaries, Super Cheap Auto Pty Ltd, Rebel Sport Ltd, SRG Leisure Retail Pty Ltd (trading as BCF and Ray’s Outdoors) and Macpac Retail Pty Ltd. The regulator claims that some of the breaches constitute ‘serious contraventions’ under the Fair Work Act.
The FWO launched an investigation after SRG Limited disclosed widespread underpayments of thousands of employees to the FWO and the Australian Securities Exchange. The legal action centers on a sample of 146 of the allegedly underpaid employees across the group. It is alleged that the employees were underpaid a total of approximately $1.14 million for their work between January 2017 and March 2019.
The regulator claims that most of the underpayments were the result of SRG Limited’s subsidiaries paying salaried employees annual salaries that failed to cover their minimum lawful entitlements, given they generally performed significant amounts of overtime work. The FWO also claims that the methodology used by SRG Limited in its remediation program has resulted in only partial back-payment of the sample employees.
FWO Sandra Parker stated that keeping large corporate sector employers accountable for any underpayments remains a priority. “The breaches alleged in this case – inadequate annual salaries for employees stretching across multiple years – have become a persistent issue for businesses across many industries,” Ms Parker said. “Every employer should be clear that if annual salaries do not cover all minimum lawful entitlements for all hours actually worked, the results can be substantial back-payment bills, plus the risk of significant court-ordered penalties. Penalties can also be higher for serious contraventions.”
“This is also the first court action where the Fair Work Ombudsman has alleged breaches by a holding company for contraventions by its subsidiaries. Holding companies who allegedly knew or reasonably should have known of underpayments within their group will be held to account,” Ms Parker said. “We expect that holding companies have thorough governance measures in place to promote compliance across their subsidiaries, and that they act immediately to rectify any problems found.”
The FWO alleges underpayments of individual sample employees ranged from small amounts to about $34,500 during the timeframe. The sample workers, which included full-time, part-time and casual staff, were based in stores located in all states and territories across Australia. The workers were responsible variously for store management, setting up stores, retail and administration.
The FWO alleges that the four SRG Limited subsidiaries, Super Cheap Auto Pty Ltd, Rebel Sport Ltd, SRG Leisure Retail Pty Ltd (trading as BCF and Ray’s Outdoors) and Macpac Retail Pty Ltd, failed to pay all entitlements owed for hours actually worked, and that overtime entitlements, weekend and public holiday penalty rates, various allowances and other entitlements were underpaid. It is alleged this involved contraventions of the General Retail Industry Award 2010, Super Retail Group Enterprise Agreement 2015 and the National Employment Standards.
