Applicant’s legal costs not approved in wage underpayments action

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This was a class action on behalf of persons who worked in managerial roles in the respondents’ supermarkets and were covered by the General Retail Industry Award 2010 (Award). The applicant alleged that he did not receive his full entitlements under the Award for the hours he worked, that he was expected or required to work in excess of rostered hours and was not lawfully remunerated for those additional hours, and that the respondents wrongfully deducted sums from his wages to cover the costs of his uniforms. He sought declarations that the respondents contravened the Fair Work Act 2009 (Cth) and orders for the payment of compensation and the imposition of civil penalties.

In this judgment, Charlesworth J approved a settlement of the proceeding, pursuant to which the respondents agreed to pay:

• $1,455,000.00 (excluding interest) in full and final settlement of the claims of the registered class members;
• $400,000 in lieu of civil penalties and $190,000 in lieu of interest to both registered class members and additional class members who subsequently registered to participate in the settlement after the Court extended the registration deadline (Additional Registered Class Members); and
• $220 for each Additional Registered Class Member (of which there were 79) totalling $17,380.00.

Her Honour also approved settlement administration costs in the sum of $95,634. However, her Honour was not in a position to approve deductions from the settlement sum for the legal costs of the applicant’s lawyers (Adero Law). Her Honour said that “[t]he Court is presently aware of a number of circumstances that are relevant to determining the rights and liabilities as between (at least) [the applicant] and Adero Law”, including that “a costs agreement entered into by [the applicant] is void and the circumstance that Adero Law has not complied with certain obligations under the Legal Profession Act 2006 (ACT)” (at [17]). Her Honour said that while those matters did not warrant the Court withholding its approval of the terms of the settlement deed, they did “require further evidence and consideration” (also at [17]). As such, her Honour made orders deferring the assessment of Adero Law’s reasonable legal costs, but provided that those costs were not to exceed, in any event, the sum of $537,132.86.

Schoneweiss v The Fourth Force Pty Ltd [2022] FCA 1236

Federal Court of Australia, Charlesworth J,
6 October 2022

Applicant’s Solicitors: Adero Law
Respondents’ Solicitors: Lynch Meyer
Applicant’s Funder: N/A

Austlii Link: Available here

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