David Jones, Country Road retailer Politix admit to underpaying staff by $4 million

Some of Australia’s best known fashion chains underpaid more than 7000 employees over six years and now have to return millions.

Two of Australia’s biggest fashion retailers will pay back more than $4 million to 7000 employees who were underpaid.

Department store David Jones and Country Road’s fashion retailer Politix confessed to underpaying staff and will also be required to pay almost $300,000 combined in a contrition payment.

The companies reported the underpayments to the Fair Work Ombudsman in September 2020, while there were also underpayments in the Country Road Group, involving staff working with Country Road, Trenery, Witchery and Mimco.

Politix underpaid about 850 employees a total of around $2.06 million in wages as well as around $45,000 in superannuation between November 2016 to September 2020.

Meanwhile, David Jones underpaid about 2800 employees a total of around $480,000 in wages, plus around $1.4 million in superannuation to about 6100 employees between April 2014 and September 2020.

David Jones underpaid one staff member over $12,000. Picture: Matt Loxton

The biggest individual wage underpayments were up to $12,576 at David Jones and $22,956 at Politix, while the average underpayment was $170 for David Jones and $2353 for Politix.

Roles impacted include managers and retailer workers at Politix, while David Jones’ staff worked in a range of roles including women’s apparel retailers, managers, online sales staff and logistics employees.

David Jones underpaid about 2800 employees a total of around $480,000 in wages, plus around $1.4 million in superannuation. Picture: Getty Images

Underpayments at David Jones and Politix were caused by failures in manual payroll processes, payroll system set-up errors, annual salaries insufficient to cover all General Retail Industry Award 2010 entitlements and the failure to compensate training and classification secondments.

As a result, underpayments were made on minimum wages, evening, weekend and public holiday penalties, overtime rates, and entitlements arising where they did not receive a 12-hour break between shifts.

David Jones also did not correctly pay superannuation as required under its enterprise agreements.

Mimco staff were also caught up in the underpayments. Picture: NCA NewsWire / Gaye Gerard

Fair Work Ombudsman Sandra Parker said David Jones and Politix had signed enforceable undertaking and shown a commitment to rectifying all underpayments and changing their practices.

“Under their enforceable undertakings, David Jones and Politix have committed to implementing stringent measures to improve compliance and protect the rights of their employees,” he said.

“These measures include commissioning, at the companies’ own cost, independent annual audits to check their compliance with workplace laws over the next two years.”

Fair Work ombudsman Sandra Parker. Picture: Aaron Francis/The Australian

She added that this matter is another reminder to employers to place a high priority on ensuring their staff receive all their lawful entitlements.

“Insufficient annualised salaries have become a persistent problem in many Australian workplaces, and breaches – if not quickly found and fixed – can lead to a substantial back-payment bill,” she said.

The companies must also continue to run an independent hotline for employees for six months and publish notices in two national newspapers plus their own websites.

Earlier this month, it was revealed seven subsidiaries of Wesfarmers Industrial and Safety will back-pay more than $4.8 million to over 3400 employees nationally and also fork out $100,000 into a government fund.

An 180-year-old company, Australian Unity, also underpaid staff a whopping $7.3 million and has been forced to make a $250,000 “contrition payment” as a result of the issue that stretched out over seven years – the Fair Work Ombudsman revealed last year.