Drakes Supermarkets facing underpayment claims in class action lodged in Federal Court


Australia’s culture of “insecure” work is fuelling wage theft claims against retailers, think tank the Australia Institute says, as a class action is launched against another major supermarket chain.

The latest underpayment claims have been levelled against independent retailer Drakes Supermarkets, which runs more than 50 stores across South Australia and Queensland.

The class action lodged by Adero Law in the Federal Court alleges Drakes workers were not paid allowances and entitlements owed from performing overtime and penalty work.

Workers “experienced unlawful deductions from their weekly pay purportedly in respect of the cost of their work uniform items,” the statement of claim said.

It said the Adelaide-based chain required staff members to “work additional shifts on days when they were not rostered to work (including on weekends) to cover the absence of other employees”.

The ABC has contacted Drakes Supermarkets for comment.

Adero Law has ongoing claims against independent retail group Romeo’s and SA convenience store chain OTR, and launched previous action against retail giants Coles and Woolworths.

Earlier this year, Coles admitted underpaying staff across its supermarket and liquor stores and set aside $20 million to pay back employees, while Woolworths began paying back up to $300 million in December.

Other large organisations recently found to have underpaid staff include the ABC, which started repaying hundreds of employees late last year, as well as Michael Hill jewellers and the company behind Gloria Jeans and Donut King.

Economist Alison Pennington, from progressive think tank the Australia Institute’s Centre for Future Work, said the retail sector had witnessed a “systematic regime of wage theft” in recent times.

Alison Pennington said penalties were not strong enough to stamp out wage theft.(ABC News: John Gunn)

“Insecure work and wage theft go hand in hand,” she said.

“It’s a race to the bottom for workers in these sectors, but it’s also a race to the bottom for economic growth and stability long-term. No-one wins from this.”

Ms Pennington said another problem was that the types of penalties imposed were often not strong enough to deter wage theft.

“The relative risk to an employer of dealing with a class action may be worth taking if they do actually pocket a windfall of many millions of dollars in unpaid wages,” she said.

“It’s going to take much more awareness of rights and conditions of workers in the workplace themselves, but much stronger compliance systems.”

Employee with cancer reluctant to take sick leave

Adero Law associate Richard Murray said the class action against Drakes currently involved 81 workers, but that up to 1,500 current and former employees may be eligible to join.

He said Drakes Supermarkets could owe up to $20 million.

“Staff were paid an annualised salary and not according to the hours they worked each week,” he said.

“I think retail workers in particular are quite vulnerable to this kind of underpayment.

“Corporations either deliberately or inadvertently are not applying the award correctly so that these large scale underpayments are occurring, and it’s unfortunately become quite prevalent in the last couple of years.”

Craig Schoneweiss
Former employee Craig Schoneweiss is the lead claimant.(ABC News: Paul Adams)

Lead claimant Craig Schoneweiss said he was underpaid over a decade working for Drakes Supermarkets in South Australia and Queensland.

He said he had been scared to take leave to address medical concerns while he was in the role, but went to a doctor after he resigned and was rushed to an emergency department after being diagnosed with testicular cancer.

“They didn’t like you taking sick leave and you almost felt like it was coming out of your own manager’s pocket,” he said.

“I fear that if I had continued my employment with Drakes, my cancer would’ve gone unnoticed and untreated.”

The Australian Retailers Association declined to comment on the case against Drakes, saying it did not “comment on matters that are subject to legal proceedings”.

In a recent submission to a parliamentary committee into wage theft, the association described the federal inquiry as a “populist, jingoistic witch hunt”.



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