Staff underpayments class action to be ‘immaterial’, says The Reject Shop

Staff underpayments class action to be ‘immaterial’, says The Reject Shop

The Reject Shop via Port Adelaide Plaza.

A class action alleging widespread staff underpayments lobbed by Adero Law is expected to be “immaterial” according to the target of the lawsuit, The Reject Shop (ASX: TRS).

Following the publication of an article by the Australian Financial Review this morning pertaining to Adero Law’s class action, The Reject Shop says it anticipates any exposure to the lawsuit will not have much of an impact.

The listed retailer also says it has not received a copy of the class action, but notes it has been in contact with the law firm in relation to seven former employees who claim that they were underpaid while working for the company.

According to The Reject Shop, one of the employees says they were underpaid by just $20.

“The Reject Shop has committed that if there has been any under award payments to team members, this will be corrected. However, Adero have not clarified details of these claims,” The Reject Shop says.

“To date, The Reject Shop has not received a copy of Adero’s class action. However, based on the previous correspondence from Adero, The Reject Shop expects any exposure to be immaterial.

“The Reject Shop takes its obligations to team members seriously and has processes in place to monitor compliance with employment laws, including external annual reviews.”

Per Adero Law’s website, the firm is investigating a number of practices that have allegedly occurred at certain stores, including paying a salary to managers and full-time staff that did not account for additional hours and/or overtime hours that workers were directed to complete beyond 38 hours per week.

The investigation is also exploring whether The Reject Shop directed staff to complete pre-shift and post-shift work without compensation, directed staff to not take meal breaks or to complete work during meal breaks without providing additional compensation, and other purported breaches.

Speaking to Business News Australia Adero Law senior associate Andrew Chakrabarty said the firm is putting the case forward on behalf of seven allegedly underpaid employees - the minimum number of claimants required for a class action in Australia -  but noted that registrations could mean between 1,000 and 1,200 staff may be represented in total. 

In total, the lead solicitor on the case said the total quantum for the case could be 'well north of $1 million', and that the lead applicant alleges underpayments of between $40,000 and $60,000.

"We've been investigating The Reject Shop for almost a year now and we've had a great deal of interest in signups," Chakrabarty said.

"Based on our quantification the group size for the class action could be anywhere between 1,000 and 1,2000 people.

"This is quite a significant underpayment."

Shares in TRS have fallen by just 0.41 per cent to $4.84 per share at 11.43am AEDT.

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