Best & Less to back-pay underpaid store managers $5.2 million

Retail company Best & Less is back paying more than $5.2 million to 686 current and former employees who were underpaid between 2013 and 2020, according to the Fair Work Ombudsman (FWO) on Wednesday.

The underpaid staff include salaried managers of Best & Less stores in regional and metropolitan areas, who were performing overtime, weekend, and night work.

They were underpaid in terms of overtime and penalty rates, as well as allowances and annual leave entitlements, according to the FWO.

Best & Less is also paying almost $500,000 in superannuation. The average underpayment is about $7,600, but the underpayments ranged between $4 to $42,144.

Best & Less discovered the underpayments after an internal review revealed that paid salaries to store managers were insufficient to cover their minimum entitlements under the General Retail Industry Award 2010.

It self-reported the incident to the FWO in December 2020. According to the retail company, it has already reimbursed most employees, including all those it could find.

Aside from underpayments, the company also failed to make and keep proper records of hours worked by store managers and assistant store managers.

EU with FWO signed for backpay of staff

Best & Less also signed an Enforceable Undertaking (EU) with the FWO, which includes a commitment to back paying all staff by October.

It is also making a commitment to implementing stringent measures to ensure employees are paid correctly, according to Acting FWO Kristen Hannah.

"These measures include commissioning independent audits of its compliance with workplace laws over the next two years," Hannah said in a media release.

Under the EU, the retail company is also required to:

• Write to all underpaid employees to notify them of the commencement of the EU
• Publish in-store, website, and social media notices detailing the contraventions
• Establish a telephone hotline for all current and former employees who worked during the relevant period to make enquiries
• Commission an independent expert to oversee its rectification programme

Best & Less should also make a contrition payment worth $200,000 to the Commonwealth's Consolidated Revenue Fund.

'Persistent problem'

The retail company adds to the growing list of major employers who are back paying staff after discovering they were underpaid for years.

These include the Commonwealth Bank of Australia, the Reserve Bank of Australia, Coles Supermarkets Australia, as well as Woolworths.

"Insufficient salaries have become a persistent problem in many Australian workplaces," Hannah said.

According to the acting FWO, the case of Best & Less should be "another reminder" to employers to meet their workplace obligations to employees.

"Employers need to be aware that employees must be paid at least the minimum entitlements that they are owed under the applicable industrial instrument, such as an award," she said. "Employers that take a 'set-and-forget' approach and fail to record and reconcile actual hours worked when paying salaries risk substantial back-pay bills to their hard-working staff."