OTR class action leaves dreams shattered after payment error by law firm Adero Law

For many workers part of the class action against OTR, it was the chance to make up for years of alleged underpayment. The disappointment has been crushing.

Shannon Riddell is one of the workers who feel let down by the settlement in the OTR case. She thought she was getting $69,000 but it turned out to be only $4000. Picture: Brenton Edwards

When Shannon Riddell received an email from Adero Law saying she was going to receive $69,000 as part of a settlement for underpayment of wages by the petrol and convenience store chain OTR, she started to cry.

This was life-changing money for the mother of four. She started to think of all the ways it could help her, help her family.

“I was planning on buying a new car for my mother who is currently going through chemo,’’ she said. “Mostly I was just excited that my partner and myself and our four children wouldn’t be struggling to put food on the table and be able to get ahead financially.”

And maybe, if there was enough left over, Shannon and her partner could start planning a wedding. An event that had long been on hold “with us struggling so much financially’’.

Mum-of-four Shannon Riddell’s dreams have been shattered after her promised $70k settlement was reduced to $4000. Picture: Brenton Edwards

The optimism didn’t last long. The $69,000 email arrived early on Tuesday, May 23. Later the same day, Adero sent another email telling Shannon “this amount was incorrect’’ and to “kindly disregard’’ the first one. Last Friday, another email arrived. That one told her the $69,000 had shrunk to $4600. It didn’t seem much recompense for not being paid properly for 50-hour weeks, night shifts with no penalty rates, acting as a manager and working through breaks.

Shannon Riddell is not alone in her disappointment, frustration and anger. Many other former and current OTR workers have contacted The Advertiser this week to tell their stories. All follow the same script. Tamara Coker was told she was receiving $205,498.76. That was reduced to $13,745.04.

Others saw payouts fall to $3000 from $117,000, while another dropped to $2360 from more than $130,000.

An email sent by Adero Law to members of the OTR class action.

“We are re-calculating the payments to Registered Group Members,” a follow-up email from Adero Law read.

“When I first saw the $131,000 figure I straight away thought of the house deposit I could put down to be able to move out of my parent’s house where I’ve been living since I got divorced,’’ one person said.

The catalyst for all the confusion was the settlement in August last year between OTR’s then-owners Shahin Enterprises and more than 2000 of its former and current workers who alleged they had performed unpaid work prior to and after rostered shifts and that meal breaks were wrongly deducted and incorrect rates paid to trainees, among other claims.

Adero and OTR settled the claim for $5.8 million, far less than the more-than $70 million figure that had been floated when the action was launched in 2020.

Lawyer Kellie Pledger worked for Adero on the case and told The Advertiser this week that “to read that it settled for around 10 per cent of the lower end of that scale is very concerning’’.

Pledger, who no longer works for Adero and is in legal dispute with the firm, said this was “the sort of situation that gives all lawyers a bad name and that is such a shame’’.

“The class action had the potential to effect real change for working class South Australians, who relied on their legal representative for protection and advocacy. Those group members have been left feeling broken and exploited once again,’’ she said.

An Adero Law spokesman blamed a “computer glitch’’ for the mistakes and said the company had moved as quickly as possible to fix the problem. He said only about 8 per cent of the class action members had received what he called “grossly overstated’’ statements. He further denied that the first figure the firm’s clients received reflected the true amount to which they were entitled.

“The first statement was not what people were due at all, it was a result of an Excel function malfunctioning,’’ he said. “People might be disappointed between the two settlement statements, but we always have and will continue to act in the best interest of our clients.’’

However, the retail workers’ union, the SDA, has questioned whether class actions run by commercial law firms are the best way to pursue allegations of breaches in workplace employment laws.

SDA state secretary Josh Peak. Picture: Kelly Barnes

SDA state secretary Josh Peak said if the union wins its current case against fast food giant McDonalds over allegations of underpayment then its members will receive 100 per cent of money awarded by the court.

Commercial law firms usually take around 30 per cent of settlements in class actions. Adero Law received $1.65 million of the $5.8 million settlement in the OTR case.

In the OTR case, Federal Court Justice Natalie Charlesworth said the settlement amount “could, at best, be described as modest’’. Justice Charlesworth had earlier said it was “extraordinary’’ that Adero had pushed for the court to accept the $5.8 million settlement, in part, because it had run out of funds to run the trial.

It’s all left workers such as Tamara Coker perplexed about why they had all invested so much time, energy and emotion into the case.

“Why would they settle for such a small amount? It just frustrates me,’’ she said. “I just don’t think they were prepared at all.’’

Originally published as OTR class action leaves dreams shattered after payment error by law firm Adero Law