Supercheap Auto, a subsidiary of Super Retail Group caught in the lawsuit. Source : Wikimedia Commons (Used under Creative Commons)
The Fair Work Ombudsman has launched legal action against Super Retail Group Limited (SRG Limited) in the Federal Court.
SRG Limited and four subsidiaries have been brought up on allegations of underpayments, reportedly totally more that $1 million.
SRG Limited and the subsidiaries Super Cheap Auto Pty Ltd, Rebel Sport Ltd, SRG Leisure Retail Pty Ltd (who are trading as BCF and Ray’s Outdoors), and Macpac Retail Pty Ltd are alleged to have seriously breached the Fair Work Act.
The investigations began after SRG Limited disclosed underpayments of thousands of employees to the Ombudsman and the Australian Securities Exchange.
Based on a sample of 146 of the allegedly underpaid employees, a total of approximately $1.14 million in underpayments between 2017 and 2019 occurred.
Most underpayments are allegedly the result of SRG Limited’s subsidiaries paying out annual salaries that did not cover minimum requirements for employment under the National Employment Standards.
Allegedly, SRG Limited’s remediation program created partial back-payments of employees in the sample.
Fair Work Ombudsman Sandra Parker said it was necessary to keep corporations such as SRG Limited accountable for underpaying their employees.
“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.
“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.” She said.
Based on the sample group of employees, individual employees were allegedly underpaid of amounts up to $34,500 during the 2017 to 2019 time period.
The allegedly underpaid employees included full-time workers, part-time workers, and casual staff throughout Australian stores.
Among the allegations against SRG Limited are those that claim Super Cheap Auto Pty Ltd and Rebel Sport Ltd failed to appropriately pay employees for overtime work and other entitlements under the National Employment Standards.
Some allegations meet the definition of ‘serious contraventions’, as defined in the Fair Work Act.
The maximum penalties for the serious contravention allegations, if found to be true, are $630,000 per breach of the Fair Work Act, which is 10 times the penalties typically applied for non-serious contraventions.
Other allegations carry penalties of up to $63,000 per breach, and an additional $63,000 for holding company liability-related penalties.
