AST Fair Work Eagers Underpayments

On Jun. 20, AST Fair Work said firm has back-paid over AUD 16mn.

  • AST Fair Work said Eagers Automotive Limited (EAL) has back-paid over AUD 16mn including interest and superannuation to staff underpaid by five of its subsidiaries.
  • The five subsidiaries have signed an enforceable undertaking (EU) with AST Fair Work.
  • Follows AST Fair Work Sep 2023 published its regulatory priorities 2023-24, #185964.
  • Background
  • EAL, formerly AP Eagers, is an Australian public company that operates automotive dealerships in Australian and New Zealand; EAL acquired the five subsidiaries in 2019.
  • This include acquiring Automotive Holdings Group Limited (AHG) with 19 businesses.
  • EAL self-reported the underpayments in Jun. 2021 after it initiated a review of the companies’ payroll after acquisition; found anomalies re 19 AHG subsidiaries.
  • The subsidiaries unlawfully failed to pay in line with award progression; incorrectly classified employees; did not pay overtime, annual leave and annual leave loading.
  • In addition, they did not pay for training; and failed to pay, as required, when employees were sent home due to no work; they also made unauthorized deductions.
  • Action Taken by EAL
  • EAL (on behalf of the five entities) has back-paid 13,277 current and former employees of those entities AUD 16.2mn, including about AUD 12.1mn in wages, AUD 1.1mn in superannuation, and AUD 3mn in interest, occurred from 2013 to 2021.
  • Rectifications outside of requirements of the EU include an additional AUD 1.9mn, including interest and superannuation, back-paid to 701 staff of 14 other subsidiaries.
  • Enforceable Undertaking
  • About AUD 200K is still owed to staff who cannot be found – under the EU, payments must be completed within 120 days or paid to AST Fair Work unclaimed monies fund.
  • The EU is with the 5 largest firms: AHG Newcastle Pty Ltd; AHG Services NSW Pty Ltd; AHG Services Qld Pty Ltd; AHG Services Vic Pty Ltd; and AHG Services WA Pty Ltd.
  • They must make combined AUD 450K contrition payment to Commonwealth’s Consolidated Revenue Fund; engage an independent provider to operate an employee hotline for three months at their own cost; inform affected staff that the EU has begun.
  • The five subsidiaries shall also provide AST Fair Work evidence of mechanisms in place to identify and rectify compliance issues associated with any future acquisitions.

Regulators AST Fair Work
Entity Types Corp; Pension
Reference PR, 6/20/2024
Functions Compliance; HR; Legal; Reporting; Treasury
Countries Australia
Category National Regulator
Products Corporate; Pensions; Retirement Plan
Regions AP
Rule Type Enforcement
Rule Date 6/20/2024
Effective Date 6/20/2024
Rule Id 216374
Linked to Rule :185964
Reg. Last Update 6/20/2024
Report Section AML & Enforcement

Last substantive update on 06/23/2024