A landmark trial against Flight Centre will start on Monday over allegations the travel retailer systemically underpaid some Australian workers.
The trial, run by Maurice Blackburn Lawyers, will allege Flight Centre operated a “dubious” pay system for at least 13 years that allowed the company to repeatedly and deliberately undercut its award obligations under the Fair Work Act.
It comes amid fierce debate over the federal government’s industrial relations omnibus bill, introduced to parliament last week, that unions and Labor argue will leave workers worse off.
The trial was brought by the Together Union on behalf of five former Flight Centre workers, though potentially thousands of current and former Flight Centre sales staff could be affected.
Last year in April, when the Federal Court action was filed, Flight Centre “categorically denied that some of its people were paid below the minimum award under the previous wage structure”.
However, Maurice Blackburn Principal Giri Sivaraman, who is leading the case, said the company had long 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,” Mr Sivaraman said.
“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.”
Mr Sivaraman said workers should be rewarded for meeting targets without having to sacrifice their basic award entitlements.
Companies like Flight Centre must ensure they are meeting the basic minimum under the award without relying on top-ups and commissions, he said.
“This system was without a doubt double dipping by Flight Centre,” Mr Sivaraman said.
Flight Centre changed its old pay system by introducing a new Enterprise Agreement on October 18 last year.
However, workers who were allegedly not paid their entitlements under the old pay scheme are still waiting to be compensated.
“In the case of our five clients we estimate they are owed more than $200,000 in lost entitlements, and we suspect thousands of other workers may also be impacted,” Mr Sivraman said.
Alex Scott, branch secretary of the Together Union, said the case would serve as a warning to other major companies flouting their legal obligations.
“Flight Centre is not above the law, and that’s why we are fighting this landmark case on behalf of our members – this was systemic wage theft and they must be held to account,” he said.
“It is disappointing that this case has had to proceed to trial, but we will do whatever it takes to make sure that Flight Centre pays workers what they are owed and sets this right.”
Flight Centre was contacted for comment but did not respond before deadline.