WHSmith admits underpaying 1500 workers by $2.2 million
Fair Work Ombudsman reduces contrition payment to $50,000 due to impact of pandemic.
National food and retail company WHSmith Australia underpaid 1500 employees more than $2.2 million over five years after failing to pay them their award entitlements.
The company has backpaid $2.257 million to 312 current and 1199 former employees and made a $50,000 contrition payment to the Commonwealth under an enforceable undertaking reached with the Fair Work Ombudsman.
The FWO said it reduced the size of the contrition payment that would ordinarily have been required “due to the significant impact of the COVID-19 pandemic on WHSmith Australia’s business”.
The company, owned by UK company WHSmith PLC, operates newsagency/bookstore and fast food/cafe stores under brands including WHSmith, Fresh+, Wild Gifts & Cards, Supanews, Gadgetshop, Zoodle, Longshot, and Immotion.
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The stores are primarily located at high traffic areas in airports, train stations and hospitals.
The admitted underpayments, which the company reported to the FWO, occurred between October 2013 and April 2019.
The underpaid workers performed various roles including stock control, customer service, food preparation and store management in retail and fast food sites located across Victoria, NSW, Queensland, WA, South Australia and the ACT.
The most significant underpayments related to a failure to pay full overtime entitlements for part-time employees and salaried store managers.
Other entitlements underpaid included a penalty rate payable when employees had less than 12 hours between shifts, annual leave entitlements and a special clothing allowance. As at October 1 this year, WHSmith identified and back-paid employees a total of $2.257 million, which includes interest and superannuation. Back payments range from $1 to over $117,000.
WHSmith is required to compensate the remaining former employees that could not be located at the time of payment within the next four months.
Fair Work Ombudsman Sandra Parker said an EU was appropriate as WHSmith had co-operated with the investigation and demonstrated a strong commitment to rectifying all underpayments.
“Under the enforceable undertaking, WHSmith has committed to implementing stringent measures to improve compliance and protect the rights of its workforce,” she said.
“This includes engaging, at its own cost, an expert auditing firm to assess the outcomes of its rectification program and audit its compliance with workplace laws over the next three years.”.
“This matter serves as a warning to all employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale.”
WHSmith is required to display public, workplace and online notices detailing its workplace law breaches, apologise to workers, commission workplace relations training for managerial staff, operate a Hotline for the next 12 months for employees and provide evidence to FWO that it has developed systems and processes for ensuring compliance in future.