Super Retail Group facing legal action

Super Retail Group and four subsidiaries has found itself facing legal action at the Federal court from The Fair Work Ombudsman (FWO). The case takes a sample of 146 employees across the group who were allegedly underpaid. The underpayment totals a reported $1.14 million work between January 2017 and March 2019. These underpayments were a result of salaried pay that failed to cover the minimum lawful pay entitlements. Super Retail Group self-reported the matter in 2018 to the FWO and undertook a back payment process, however; the FWO also alleges that the remediation methodology used has resulted in only partial back-payment of the sample employees despite Super Retail Group having back paid more than $52.7 million in entitlements and interest to both current and former team members.

“We note the allegations in the proceedings and reiterate our view that this matter represents a regrettable chapter in our company’s history,” Super Retail Group CEO Anthony Heraghty stated in an apology to staff today. “It is unacceptable and contrary to the company’s values for any team member not to be paid correctly. We are sorry for the impact on our team members and today we restate our unreserved apology to each person affected.

“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.”

FWO is taking action against Super Retail Group 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 FWO claims the subsidiaries failed to pay employees all the 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 that Super Cheap Auto, SRG Leisure and Rebel knew the overtime contraventions were occurring from at least April 2017, but failed to take action to address this until January 2018.

The FWO alleges that these actions meet the definition of ‘serious contraventions’ under the Fair Work Act.

“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.

“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,” 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.”

Super Retail Group could face penalties of up to $63,000 per breach.

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