Super Retail board faces fresh legal battle for allegedly tampering with timesheets

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Embattled Rebel Sport owner Super Retail Group is facing a ballooning legal bill and a claim for tens of millions of dollars in additional payroll costs amid a looming class action that will claim it has underpaid thousands of store managers since 2019.

One day after Super Retail sacked its chief executive, Anthony Heraghty, in the fallout over his alleged relationship with the group’s former HR boss, law firm Adero announced it is preparing to mount a class action lawsuit against the retailer that will allege it systemically tampered with employees’ payroll records to avoid paying overtime and other entitlements.

Rebel Sport owner Super Retail is facing a looming class action.

The class action will claim that up to 3000 store managers across Rebel Sport, Supercheap Auto, BCF and Macpac were not paid award rates since 2019, and that Super Retail used “very aggressive” wage control practices similar to those that resulted in Coles and Woolworths’ combined $1 billion underpayments bill.

Super Retail was forced to hand over payroll records after Adero Law, representing two current and former employees of the retailer, successfully filed a preliminary discovery application to the Federal Court to demand employees’ actual clock-in and clock-out hours, as opposed to “rounded” or “edited” hours.

Matthew Ridgewell, a store manager who worked at Rebel Sport for 5.5 years, was paid for 43 hours in the week before Christmas in 2022, according to payslip records seen by this masthead. However, a timecard shows the number of hours worked was more than 48. On average, Ridgewell was not properly paid for at least 12 to 18 hours’ of work a month, the law firm believes.

In another instance, BCF store manager Jeff Arnold’s payslip showed 43 hours worked in the week between December 19 to 25, 2021. However, payroll records showed the number of hours worked was closer to 54.

Adero Law managing principal Rory Markham said Super Retail knowingly went to great lengths to create a wage system outside the retail industry award.

“[Super Retail Group] had designed their internal pay controls to reflect a very aggressive system of minimum rates of pay,” said Markham.

“It can’t be that much of a shock to their board that if you bet on the wrong horse, it will eventually have a class action against you.”

Adero Law is alleging the payroll records also found Super Retail tried to offset underpayments in some weeks with overpayments in other pay periods, a practice the Federal Court ruled was unlawful in the Woolworths and Coles case.

The class action law firm will also allege that staff performed additional administrative tasks from home without pay; required employees to work overtime and public holidays without consideration to personal circumstances, which is not permitted by the Fair Work Act; and routinely deducted leave from managers whom the company believed hadn’t worked enough overtime.

Super Retail declined to comment.

The impending class action may add to underpayments Super Retail has already admitted to. The Fair Work Ombudsman took legal action in the Federal Court against the retailer in 2023 over a review Super Retail conducted in 2018 that uncovered more than $60 million worth of underpayments. This resulted in the early departure of then-chief executive Peter Birtles, who apologised for the issue.

Former Super Retail CEO Peter Birtles (left) and Anthony Heraghty, whose employment has been terminated by the company.

Markham said the law firm would seek significant penalties for the alleged underpayments’ impact on workers and to act as a deterrence to other employers.

“We are [launching the class action] to create fairness between any retail worker against large ASX retailers that are engaged in common practice that has, on the sensible view of the records, resulted in substantial underpayments.”

Adero Law litigation specialist Nicholas Driver said Super Retail was a repeat offender.

“They just threw a few some extra dollars at it, increased the salaries. But they never thought, well, let’s just pay the award as it’s intended.”

In 2020, Heraghty, who replaced Birtles in the top job, blamed the problem on an “underinvestment in computer systems” and a failure to implement processes and policies to ensure the systems accurately accounted for “complexities” in wages.

The ombudsman’s action was put on the backburner until the Coles and Woolworths judgments were delivered this month.

Rebecca Farrell, one of two whistleblowers and former lawyers for the company that launched legal action against Heraghty and Super Retail for alleged workplace bullying and breaches of the Corporations Act, claimed Heraghty’s alleged relationship with Kelly led to undisclosed conflicts of interest as Heraghty was involved in Kelly’s performance, remuneration, and ultimately her redundancy package. The case is ongoing.

Adero Law expects to lodge the class action in the Federal Court next week, and is investigating a similar class action against Kmart and Bunnings operator Wesfarmers.