The Fair Work Ombudsman will take Super Retail Group, the owner of popular local brands including Rebel Sport and Supercheap Auto, to court with allegations it engaged in serious contraventions of the Fair Work Act when it underpaid staff across its brands.
The regulator confirmed on Friday morning it had started legal action against the company in the Federal Court, focusing on 146 employees who were allegedly underpaid around $1.14 million between January 2017 and March 2019.
The ombudsman alleges that many of these underpayments came about because Super Retail paid staff annual salaries that failed to cover their minimum legal entitlements, given they performed significant amounts of overtime.
“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,” Fair Work Ombudsman Sandra Parker said.
The court action is against SRG Limited as well as four of the group’s subsidiaries: Super Cheap Auto Ltd, Rebel Sport Ltd, Macpac Retail Ltd and SRG Leisure Retail Limited, which trades as BCF and Ray’s Outdoors.
It’s claimed that the underpayments ranged from small amounts to $34,500.
Super Retail Group self-reported the underpayments to the regulator in 2018 and commenced a program to delivery backpay. On Friday, the company said this process had been “substantially completed” and that it had paid $52.7 million to current and former employees.
But Fair Work alleges that based on the sample group of employees it will focus on in its case, Super Retail Group’s methodology has resulted in only partial back-pay for workers.
The ombudsman will also allege that the company and its subsidiaries knew that a failure to pay correct overtime to staff was likely occurring from April 2017, but failed to take action until January 2018.
Super Retail’s managing director Anthony Heraghty said the company restated its apology to team members affected and said since 2018 the group had changed its processes to ensure staff are paid correctly.
“We note the allegations in the proceedings and reiterate our view that this matter represents a regrettable chapter in our company’s history. It is unacceptable and contrary to the company’s values for any team member not to be paid correctly,” he said.
This case is the first time the regulator has taken a holding company, in this case SRG Limited, to court over the actions of 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.
The case will allege that some of company’s breaches, including failing to correctly pay workers for preparing new stores or refurbishing existing ones between September 15 2017 and January 1, 2018 amount to “serious contraventions” of the Fair Work Act.
Maximum penalties for serious contraventions are $630,000 each, ten times that of the usual penalty.
“Super Retail Group will review the proceedings and continue to engage with the FWO on these matters,” the company said in a statement to the ASX.
A directions hearing for the case in Sydney is yet to be scheduled.
Super Retail Group shares have risen 16.6 per cent year-to-date to close at $12.56 on Thursday, with the share price jumping after the company revealed strong sales across its brand portfolio in the six months to December 2022.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Source: Thanks smh.com