Australian retailer Best & Less has back-paid staff more than $5.2 million and signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman.
The Fair Work Ombudsman noted Best & Less self-reported the underpayments to the federal office in December 2020 following an internal review.
That review found salaried managers in its stores had been paid salaries that were insufficient to cover their minimum entitlements under the General Retail Industry Award 2010, including penalty rates, overtime, allowances and annual leave loading.
Best & Less’s retail operation in Australia spans 189 clothing and household linen stores and an online retailing platform.
The underpaid employees were involved in managing a Best & Less store and many performed overtime, weekend and night work, The Fair Work Ombudsman noted.
This resulted in Best & Less underpaying the employees’ overtime and penalty rates. Allowances and annual leave entitlements were also underpaid.
Best & Less also failed to make and keep proper records of hours worked by store managers and assistant store managers, FWO reported.
Staff were underpaid in regional and metropolitan areas throughout every state and territory between 2013 and 2020.
Best & Less is back-paying 686 current and former employees a total of $5.21 million in salary underpayments, plus almost $500,000 in superannuation.
It has already back-paid the large majority of employees, including all it could find, and under the EU it must back-pay all staff by October.
Back-payments range from $4 to $42,144. The average underpayment is about $7,600.
Acting Fair Work Ombudsman Kristen Hannah said an EU was appropriate as Best & Less had cooperated with the FWO’s investigation and demonstrated a strong commitment to rectifying underpayments.
“Under the Enforceable Undertaking, Best & Less has committed to implementing stringent measures to ensure all its workers are paid correctly,” Hannah said. “These measures include commissioning independent audits of its compliance with workplace laws over the next two years.
“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.
“Employers need to be aware that employees must be paid at least the minimum entitlements that they are owed under the applicable industrial instrument, such as an award.”
“Employers that take a ‘set-and-forget’ approach and fail to record and reconcile actual hours worked when paying salaries risk substantial back-pay bills to their hard-working staff.”
Under the EU, Best & Less must make a $200,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.
The EU also requires Best & Less to write to all underpaid employees to notify them of the commencement of the EU; publish in-store, website and social media notices detailing the contraventions; establish a telephone hotline for all current and former employees who worked during the relevant period to make enquiries; and commission an independent expert to oversee its rectification program.
Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance. An interpreter service is available on 13 14 50.