Car dealership giant backpays $16m to 13,000 workers

Eagers Automotive Limited has back-paid more than $16m to 13,277 workers who were underpaid by five of its subsidiaries.

Eagers Automotive Limited underpaid over 13,000 workers. Picture: AAP

Australia’s largest car dealership business, Eagers Automotive Limited, has back-paid more than $16m, including interest and superannuation, to 13,277 workers who were underpaid by five of its subsidiaries.

EAL operates dealerships that collectively sell almost all major vehicle brands, including Toyota, Ford, Mercedes-Benz, Kia, Volkswagen and Hyundai and operates across Sydney, Brisbane, Melbourne, Perth and Newcastle.

EAL was formerly AP Eagers which, in 2019, acquired Auto­motive Holdings Group Limited, a holding company for 19 businesses. A subsequent audit by EAL uncovered the underpayments of workers across eight years in five of the businesses,

The audit found EAL subsidiaries unlawfully failed to pay in line with award progression; incorrectly classified employees; did not pay overtime, annual leave and annual leave loading; did not pay for training; and failed to pay, as required, when employees were sent home due to no work. They also made unauthorised deductions.

The findings were reported to the Fair Work Ombudsman and the five companies entered into an enforceable undertaking thats includes a $450,000 contrition payment to government.

The FWO said EAL had backpaid $16.2m to 13,277 current and former employees of the five entities, including about $12.1m in wages, $1.1m in superannuation, and $3m in interest.

The underpayments occurred between 2013 and 2021.

Rectifications outside of the requirements of the enforceable undertaking include an additional $1.9m, including interest and superannuation, back-paid to 701 current and former employees of 14 other subsidiary companies. About $200,000 is still owed to employees who cannot be found.

Employees affected by the breaches were engaged full-time, part-time and casually across car and truck dealerships in the network as finance officers, and in car sales, parts sales and servicing employees.

Fair Work Ombudsman Anna Booth said an EU was appropriate as the underpayments largely relate to past non-compliance identified by EAL following an acquisition of previously separate entities.

She said the companies had co-operated with the FWO’s investigation and demonstrated a strong commitment to both rectifying underpayments and making changes to ensure they were not repeated.

Ms Booth said the matter served as a warning to all employers about what was at stake if they failed to ensure rigorous compliance with awards and enterprise agreements.

“In this matter, long-term breaches resulted from a lack of a consistent time and attendance system along with reliance upon manual paper timesheets, and a decentralised payroll system – plus a lack of awareness of workers’ legal entitlements,” she said.

“The companies’ disappointing, unchecked breaches left them significant staff underpayments and related rectification costs.

“It’s pleasing EAL proactively looked for issues in its new acquisitions, then self-reported to FWO and endeavoured to rectify them. Large employers need to place a higher priority on having systems and processes in place that ensure employees’ full lawful entitlements are met.”

Individual back-pay ranges up to $69,298, at an average $1217.