Flight Centre in court over ‘double-dipping’ claim on staff commissions
Flight Centre has been accused of underpaying five workers more than $200,000 in a case that starts today in the Federal Court.
Flight Centre's founders get more freedom to sell their shares (Photo: AAP Image/Glenn Hunt)
Five workers allege Flight Centre used a pay system which led to systemic underpayment of more than $200,000.
They claim it used a “dubious pay structure that enabled the company to repeatedly undercut its award obligations under the Fair Work Act”.
The workers allege that Flight Centre used its commissions system to meet its award entitlements and the law firm running the case, Maurice Blackburn, said it believed thousands more workers may have been affected.
Flight Centre said the allegations in the proceedings related to a previous wage model and was misconceived. It would be defending the matter.
The company’s shares fell by more than 3 per cent this morning.
Maurice Blackburn principal Giri Sivaraman said Flight Centre had long operated a complex system of commissions and top-ups to undercut its responsibilities on basic entitlements under the Fair Work Act.
“This system was without a doubt double-dipping by Flight Centre,” Sivaraman said.
“Flight Centre for years operated a dubious system that enabled them to use the same sum of money paid to workers for two different purposes – they ran a target-based incentive scheme for sales staff that paid commissions, and then pointed to these same commissions to argue that they were meeting basic award requirements.
“The law doesn’t work like that. You can’t substitute commissions for a worker’s award entitlements, yet that’s exactly what Flight Centre did for years.
“While Flight Centre have now changed their system through a new Enterprise Agreement, workers who were impacted under the old system still have entitlements outstanding and must be compensated.”
He said he would be seeking orders for an audit of the Flight Centre books which he said would have the potential to reveal more.
Branch Secretary of the Together Union, Alex Scott, said the case was important in holding major companies such as Flight Centre to account in meeting their obligations under the law.
“Flight Centre is a massive company who for years ran a calculated and deliberate system that relied on commissions to drive down the wages of its workers,” Scott said.
“That system allowed Flight Centre to repeatedly pay many workers under the award.”
“It could be affecting several thousand workers or former workers.
“If we have success here we will go back to the employer and ask them to recalculate what they owe the workers.
This an example of the complex mechanisms used by employers to avoid award conditions. One of the reasons we didn’t prosecute this earlier is that the way their payslips were structured it was impossible for them to see exactly how their award wages and commissions were structured.”