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More than 7,000 employees have been short-changed and both companies have signed undertakings with the FWO.
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David Jones, Politix forced to back pay workers over $4 million
24 February 2023
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10 minute read
Department store David Jones Pty Ltd along with fashion company Cicero Clothing Pty Ltd, trading as Politix, will be forced to back-pay $1.9 million and $2.1 million respectively to more than 7,000 underpaid employees.
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The underpayments by the businesses were reported to the FWO in September 2020 and the regulator determined the underpayments were caused by failures in the manual payroll process and payroll system set-up errors.
Due to the blunders employees were underpaid their minimum wages, penalties, overtime rates, and entitlements owed where they did not receive a 12-hour break between shifts.
Politix was found to have underpaid approximately 850 employees $2.06 million in wages and $45,000 in superannuation between November 2016 and September 2020.
David Jones underpaid 2,800 employees a total of $480,000 in wages plus almost $1.4 million in superannuation to approximately 6,100 employees between April 2014 and September 2020.
Individual wage underpayments were up to $12,576 at David Jones and $22,956 at Politix while the average was $170 for David Jones and $2,353 for Politix.
Both entities are part of the South African-based Woolworths Holdings Limited’s Australian operation with Politix part of the Country Road Group.
Fair Work Ombudsman Sandra Parker said the enforceable undertakings were an appropriate measure as both businesses had shown a commitment to rectifying all underpayments and improving 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,” said Ms Parker.
“These measures include commissioning, at the companies’ own cost, independent annual audits to check their compliance with workplace laws over the next two years.”
“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.”
As part of the enforceable undertakings, the companies must back-pay the remaining underpayments and superannuation along with interest of $60,00 for David Jones and approximately $409,000 for Politix, by April 2023.
Both businesses were also required to make payments to the Commonwealth’s Consolidated Revenue Fund, with David Jones needing to pay $130,000 and Politix $160,000 according to the FWO.
When the underpayments were made known in September 2020 then interim CEO of David Jones Ian Moir apologised to his staff.
“Our team members should expect to be paid correctly. We deeply regret this has not occurred and apologise unreservedly to our team,” said Mr Moir.
At the time CEO of the Country Road Group Scott Fyfe also apologised to Politix employees.
“We sincerely apologise to all team members impacted by this issue, and are working hard to resolve the matter immediately,” he said.
“We’ve now completed a thorough review of systems and processes and taken the necessary steps across the group to ensure these errors cannot be repeated.”
The firms were also required to run independent hotlines for employees for six months and publish notices in two national newspapers and on their own websites.
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