Drakes Supermarkets agrees multimillion dollar class action settlement

Drakes Supermarkets has agreed to pay millions to settle a pay dispute with hundreds of current and former staff in SA and Queensland. Are you owed money?

Independent supermarket operator Drakes has agreed to a multimillion dollar settlement with employees following a long-running pay dispute.

Under the terms of the proposed class action settlement, Drakes will pay out $1.455m to current and former managers, who had claimed they were underpaid while working at Drakes stores across South Australia and Queensland between 2014 and 2020.

If approved by the court, the lump-sum payment will be divided between employees who have already registered to be part of the proceedings.

And the payout figure could rise, with other eligible staff members given until May 6 to register their additional claims.

A further $590,000 will be paid out by Drakes to staff in penalties and interest.

The terms of the proposed settlement are detailed in orders issued by the Federal Court last Friday. It follows mediation between the parties late last year.

Adero Law, which launched the class action on behalf of Drakes employees in 2020, suggested at the time that about 1000 current and former employees could be eligible for compensation.

The firm’s “conservative” estimates at the time suggested the scale of underpayment exceeded $20m.

Roger Drake heads up Drakes Supermarkets, which has agreed to a multimillion dollar settlement with staff. Picture: Kelly Barnes

On Tuesday the firm declined to disclose the number of employees who had already registered claims, or how many additional staff members may be entitled to compensation.

“We are pleased that the parties have reached an in-principle settlement and look forward to advancing the matter through the settlement approval stage of the proceedings,” Adero Law associate Andrew Chakrabarty said.

“We hope to be able to get a timely and effective outcome for the benefit of our lead applicant and group members.”

The lead plaintiff in the class action is Craig Schonweiss who worked at Drakes stores at Hallett Cove and in Queensland for more than a decade.

As part of the proceedings, Adero alleged that Drakes failed to pay managers allowances and entitlements for overtime and penalty work. In 2020 the firm said that it was “instructed” that Drakes “harboured a culture where excessive hours were expected of all salaried staff, which flowed from the very top of the Drakes management”.

Drakes has denied the allegations and defended the claims, and the proposed settlement comes with no admission of liability on the part of the company.

Class action members are prevented from making future claims for underpayment against the company regarding the six-year period covered by the class action.

The statute of limitations for underpayments in Australia restricts compensation claims to the six years predating the lodging of legal action.

Drakes is the country’s largest independent supermarket chain, with more than 60 stores across South Australia and Queensland.

Its proposed settlement follows a similar payout agreement reached between another independent supermarket operator, Romeo’s Retail Group, and its staff in December.

Adero is currently progressing several other high-profile underpayment class actions through the courts, including against convenience giant OTR.

The Drakes and Romeo’s settlement agreements will be considered for approval by the Federal Court on June 14.

Drakes chief executive Roger Drake declined to comment.