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UPDATED: The holding company for Supercheap Auto and Rebel Sport allegedly shortchanged workers for more than two years.
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FWO takes retail giant to court over $1.1m in staff underpayments
20 January 2023
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The Fair Work Ombudsman (FWO) has begun legal action in the federal court against Super Retail Group Limited (SRG) and four of its subsidiaries after alleging that the organisation failed to fully back-pay employees as part of its $52.7 million remediation process.
The FWO said SRG’s annual report claimed all underpayment issues were identified and complete with the $52.7 million in back payments covering more than 26,488 current and former team members at high-profile outlets including Supercheap Auto and Rebel Sport.
A FWO alleged that its sample of 146 employees had still been underpaid approximately $1.14 million, a spokesperson said.
“We allege that SRG and its subsidiaries’ approach to its remediation program has not accurately calculated entitlements under the Retail Award and its enterprise agreements, and despite back-payments, further amounts are still owed,” the FWO said.
“Differences between the FWO’s and SRG’s approach to calculating the outstanding entitlements mean it is not possible to precisely identify at this stage what remains outstanding to the 146 employees, these amounts will be determined during the proceedings.”
The FWO alleged that the methodology used by SRG in its remediation program resulted in only partial back-payment of employees.
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SRG said it had undertaken and completed its back payment program for affected team members with assistance from external advisers.
“We are sorry for the impact on our team members and today we restate our unreserved apology to each person affected,” said SRG managing director and CEO Anthony Heraghty.
“Since 2018 we have changed our processes to fix the issues and help to ensure team members are being paid correctly.”
“We have effectively completed our detailed remediation process to back pay affected team members and have fully cooperated with the Fair Work Ombudsman’s investigation.”
The 146 sample workers had different roles ranging from store management and set up to retail and administration, and the worst affected were shortchanged up to $34,500 over the period, the FWO claimed.
The underpayments came about when SRG subsidiaries paid annual salaries that failed to cover minimum entitlements due to significant amounts of overtime.
The SRG subsidiaries allegedly involved include Supercheap Auto Pty Ltd, Rebel Sport Ltd, SRG Leisure Retail Pty Ltd (trading as BCF and Ray’s Outdoors), and Macpac Retail Pty Ltd.
“This is also the first court action where the FWO has alleged breaches by a holding company for contraventions by its subsidiaries,” said Ms Parker. “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.”
The FWO said it was seeking penalties against SRG and each of the four subsidiaries. The penalties ranged up to $63,000 per breach to $630,000 per breach for serious contraventions.
The FWO said it would also seek court orders for the four subsidiaries to rectify outstanding entitlements allegedly owed to the 146 sample employees.
Fair Work Ombudsman Sandra Parker said it was crucial to keep large corporate sector employers accountable.
“The breaches alleged in this case — inadequate salaries for employees stretching across multiple years — have become a persistent issue for businesses across many industries,” said Ms Parker.
“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.”
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