David Jones, Politix workers underpaid $4m

David Jones will make a $130,000 ‘contrition payment’ to the commonwealth and Politix will pay $160,000 after underpayments were discovered.

David Jones employees have been backpaid wages and super. Picture: Getty Images

Seven thousand underpaid employees of David Jones and the men’s retail company Politix have been repaid $4m in wages and superannuation.

Under an enforceable undertaking with the Fair Work Ombudsman David Jones has agreed to make a $130,000 “contrition payment” to the commonwealth and Politix will pay $160,000.

Both entities are part of South African-based Woolworths Holdings Limited’s Australian operations. Politix is part of the Country Road Group.

Underpayments by David Jones and Politix, as well as more broadly in the Country Road Group, were reported by the companies to the FWO in September 2020.

The underpayments have been blamed on “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”.

Employees were underpaid their 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.

About 850 Politix employees were underpaid $2.06m in wages and $45,000 in superannuation over almost four years until September 2020.

David Jones underpaid about 2800 employees a total of around $480,000 in wages, plus around $1.4m in superannuation to about 6100 employees, between April 2014 and September 2020. The large majority of back payments have been made.

Fair Work Ombudsman Sandra Parker said EUs were appropriate as David Jones and Politix had shown a firm 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,” Ms Parker 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.

“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.”

The EUs require the companies to back-pay the remaining underpayments and superannuation, plus total interest of around $60,000 for David Jones and around $409,000 for Politix, by April this year. Remaining payments relate only to former employees.

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

Underpaid employees worked in all Australian states and territories. Underpaid Politix employees were managers and retail workers, while David Jones’ staff worked in a range of roles including women’s apparel retailers, managers, online sales staff and logistics employees.

Country Road Group reported and rectified underpayments of lesser amounts at Country Road, Trenery, Witchery, Mimco and Country Road Group Logistics.