OTR agrees to $5.8m settlement for wage underpayment class action

SA’s largest private employer, OTR, has agreed to pay millions to settle a long-running pay dispute with hundreds of current and former staff.

South Australia’s largest private employer, petrol and convenience store chain OTR has agreed to a multimillion-dollar settlement of a long-running pay dispute with hundreds of employees.

Under the proposed class-action settlement, Shahin Enterprises – the employing entity for the OTR group – will pay out $5.8m to current and former employees, who had claimed they were underpaid while working at sites across South Australia 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. Employees who believe they are entitled to compensation have until October 24 to register.

The class action, brought by Adero Law on behalf of lead plaintiff Aaron Furnell in May 2020, claimed OTR employees performed unpaid work prior to and after rostered shifts, had meal breaks wrongly deducted from their wages, were not paid proper overtime rates and were unfairly forced to pay for uniforms and police checks.

At the time legal proceedings were initiated, the law firm suggested that more than 8000 current and former employees could be eligible for compensation, and predicted that total underpayments over the six-year period may have reached up to $70m.

OTR had denied the allegations and defended the claims, and the proposed settlement comes with no admission of liability or wrongdoing on the part of the company.

The terms of the settlement agreement, which was reached after mediation between the parties in May and June, are detailed in orders issued by the Federal Court last Friday, and require court approval.

Legal costs of the class-action members will be taken from the $5.8m settlement payment, and will be capped at a maximum of $1.5m.

Payments to individual employees will be calculated based on a number of factors including the individual’s position and the number of hours worked.

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.

OTR employs more than 3000 people in SA and operates more than 170 outlets across South Australia, Victoria and WA.

The proposed settlement follows similar agreements reached between two of the state’s largest independent supermarket chains and their employees.

Drakes and Romeo’s Retail Group both agreed to pay out more than $2m to settle separate disputes with their staff, in April 2022 and December 2021, respectively.

A Federal Court hearing will be held on December 13 to decide whether to approve the proposed settlement between OTR and its staff.

An OTR spokesman said: “As the matter is currently before the courts, OTR is unable to comment”. Adero Law also declined to comment.