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"Small mistake" costs company $1.3 million

Posted 8 March 2012 by John Pezy (Flinders University)

Fair Work Ombudsman Nick Wilson has reminded employers they can't expect employees to perform unpaid work before or after their shifts, after securing a $1.3m enforceable undertaking from retailer Super A-Mart.

Wilson said Super A-Mart required employees to start work before their rostered shift to prepare for store opening and stay back after their shift had finished, without paying them.

It also doesn't pay workers for attending compulsory staff meetings and information sessions outside of their rostered shift times.

After the company voluntarily reimbursed the worker who complained to the FWO, the regulator asked it to conduct an audit to identify whether other employees had also been underpaid.

Super A-Mart discovered it had underpaid 877 employees a total of $1.376 million between March, 2006 and March, 2010.

The company has more than 30 stores, in Queensland, NSW, South Australia, Victoria and Western Australia.

It claimed that underpaying its employees was a mistake due to a "breakdown in management communication".

"The case highlights that a small mistake affecting a large workforce over an extended period of time can result in a hefty bill for back-payment of wages," Mr Wilson said

Super A-Mart has agreed to reimburse the workers. As part of an enforceable undertaking with the Ombudsman, it will donate $120,000 to the Working Women’s Centre in Queensland to help it promote workplace relations compliance.

Also under the undertaking, Super A-Mart must:

  • Reimburse all underpaid staff in full within two months.
  • Write a letter of apology to all affected employees.
  • Conduct a paid meeting of all existing employees affected by the breach to explain the contravention.
  • Issue a memo to all employees, to be displayed in all stores and posted on the company’s website for 30 days.
  • Place an advertisement in the The Australian, apologising for the breach and advising the public it has taken corrective action.
  • Ensure all store managers attend workplace relations training courses.
  • Commission the preparation of a workplace relations compliance manual for distribution to all staff.
  • Report to the Fair Work Ombudsman at the end of the financial year for the next three years on the pay and conditions of its employees.
  • Report within 28 days details of the implementation of systems and processes designed to ensure ongoing compliance with workplace laws.

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