Landmark trial to commence against Flight Centre for systemic underpayment of workers

14 December 2020
A landmark trial will commence today in the Federal Circuit Court against Flight Centre, alleging systemic underpayment of workers through a dubious pay structure that enabled the company to repeatedly undercut its award obligations under the Fair Work Act.

The trial is being run by Maurice Blackburn Lawyers and brought by the Together Union on behalf of five former Flight Centre workers, with potentially thousands of current and former Flight Centre sales staff also impacted.

Maurice Blackburn Principal Giri Sivaraman, who is leading the case, 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,” Mr 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.

“Workers should be rewarded for meeting targets without having to sacrifice their basic award entitlements, and companies like Flight Centre must ensure they are meeting the basic minimum under the award without relying on top-ups and commissions.

“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.

“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,” he said.

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,” Mr Scott said.

“That system allowed Flight Centre to repeatedly pay many workers under the award.

“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.

“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,” he said.

Media inquiries: Jade Knight, Maurice Blackburn Lawyers – 0417 969 438, or Chris O’Regan at Together – 0407 379 284

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