The ASX-listed company operating retail chains Rebel Sport, BCF and Super Cheap Auto is facing legal action brought on by the Fair Work Ombudsman.
The ombudsman on Friday revealed that the Federal Court would hear of "serious contraventions" under the Fair Work Act against Super Retail Group Ltd (ASX: SUL) relating to alleged underpayment of staff.
Four of Super Retail's subsidiaries are also named in the legal action.
"The breaches alleged in this case – inadequate annual salaries for employees stretching across multiple years – have become a persistent issue for businesses," said Fair Work ombudsman Sandra Parker.
"Every employer should be clear that if annual salaries do not cover all minimum lawful entitlements for all hours actually worked, the results can be substantial back-payment bills, plus the risk of significant court-ordered penalties."
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Some staff left $34,500 short
The court case will focus on a sample of 146 employees who were allegedly underpaid $1.14 million for work between January 2017 and March 2019.
Super Retail has actually undertaken a remediation program, but the ombudsman will state that the back payments fall short.
Some staff members have been underpaid as much as $34,500.
Super Retail chief executive Anthony Heraghty announced to the ASX that any incorrect payment of staff was "unacceptable and contrary to the company's values".
"We are sorry for the impact on our team members and today we restate our unreserved apology to each person affected," he said.
"Since 2018, we have changed our processes to fix the issues and help to ensure team members are being paid correctly."
Super Retail shares were down 0.64% in mid-morning trade Friday. The stock currently pays out a 5.6% dividend yield.
First-ever court action against holding company
Parker stated that this is the first time that court action has been taken against a holding company for the alleged sins of its subsidiaries.
"Holding companies who allegedly knew or reasonably should have known of underpayments within their group will be held to account," she said.
"We expect that holding companies have thorough governance measures in place to promote compliance across their subsidiaries, and that they act immediately to rectify any problems found."
