Best & Less to back-pay $5.2 million of store staff underpayments

Australian retailer Best & Less is back-paying 686 current and former employees a total of $ 5.21 million in salary underpayments and nearly $ 500,000 in superannuation.

Best & Less self-reported the underpayments in December 2020 after undergoing an internal review. It found its payment of salaried store managers failed to meet award-wage entitlements, including penalty rates, overtime, allowances and annual leave loading.

As The Fair Work Ombudsman details, “Staff were underpaid in regional and metropolitan areas throughout every state and territory between 2013 and 2020.”

Throughout this time, many store managers had performed overtime, weekend and night work but were not compensated correctly with overtime and penalty rates. These employees’ allowances and annual leave entitlements were also affected.

The Ombudsman disclosed that Best & Less had not made or kept proper records of hours worked by store managers and assistant store managers.

The underpayment sums range from $4 to $42,144, averaging around $7,600. The Ombudsman says Best & Less has already back-paid the majority of employees. Additionally, Best & Less has signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman, under which it must complete all back-payments to staff by October 2023.

Under the EU, Best & Less will also make a $200,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund. A contrition payment acts as a non-compliance deterrent, enabling employers to avoid significant legal costs and civil penalties associated with litigation. This type of payment is comparable to a penalty, though it provides substantial discounts for early disclosure and cooperation.

Acting Fair Work Ombudsman Kristen Hannah said that Best & Less had cooperated with the FWO’s investigation and demonstrated a solid commitment to rectifying underpayments. She explains, “Under the Enforceable Undertaking, Best & Less has committed to implementing stringent measures to ensure all its workers are paid correctly. These measures include commissioning independent audits of its compliance with workplace laws over the next two years.”

Hannah adds, “This matter is another reminder to employers to place a high priority on meeting all of their workplace obligations to staff. Insufficient salaries have become a persistent problem in many Australian workplaces.”

She emphasised that employers’ awareness of paying minimum entitlements to their employees, as owed under the “applicable industrial instrument”, is imperative.

The retail operations of Best & Less in Australia include 189 clothing and household linen stores and an online retailing platform.