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Rebel Sport, Supercheap Auto owner underpaid staff $32m

Sydney Morning Herald logo Sydney Morning Herald 4 days ago Patrick Hatch
a man wearing a suit and tie: Super Retail boss Peter Birtles said he would stand down as CEO a month early. © Daniel Munoz Super Retail boss Peter Birtles said he would stand down as CEO a month early.

The retail group that owns Rebel Sport, Supercheap Auto and Macpac says it underpaid store managers by about $32 million over the past six years by not applying overtime rates properly.

Super Retail's chief executive, Peter Birtles, who was due to stand down as CEO on March 31, said he would bring his departure date forward to February 20 in recognition of the "significance of this underpayment".

“We are very disappointed that we have let these team members down and not met our standards,and we apologise to each person affected unreservedly," Mr Birtles said.

Super Retail Group, which also owns the Rays Outdoors and BCF retail chains, said on Tuesday a recent review of its employment arrangements had uncovered the underpayments.

That review was launched last year after the company discovered it underpaid workers setting up new stores by $8 million, also by not applying penalty rates and other allowances to the overtime hours they worked.

“The issue with our retail managers reflects the same problem that we recently uncovered with our Set Up team members," Mr Birtles said. "They are both serious underpayments that we deeply regret."

Retail managers affected by the underpayments made up about 10 per cent of Super Retail's workforce during the six-year period.

On Tuesday, Super Retail said it would recognise about $32 million to cover the cost of paying back managers what they are owed, plus about $11 million to cover interest and payroll tax.

The $43 million put aside to cover the backpayments represents about a third of its net profit last year ($128 million).

Super Retail said it was continuing to engage with the Fair Work Ombudsman about the underpayments after self reporting last year's breach to the workplace watchdog.

Last week, Qantas admitted to underpaying about 55 of its office staff, by an average of $8000 a year over several years, by putting them on contracts rather than applying the award rate.

Super Retail also put out a strong trading update on Tuesday, revealing it had defied gloomy retail conditions to grow total sales by 6 per cent and earnings by 11 per cent in the six months to the end of December.

The company, which is due to hand down its half-year earnings on Thursday, said like-for-like sales grew 8 per cent at Rebel Sport and 4 per cent at Supercheap Auto in the six weeks of 2019.

Investors rallied at the trading update, sending Super Retail's shares up 8 per cent to $8.01 in early trading.

Super Retail released its trading update to the ASX separately to its underpayment mea culpa, and the update did not mentioned the $43 million in backpayment costs.

The company's shares quickly lost most of their gains, and at midday were trading up 2 per cent at $8.01.

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