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Aldi found liable for unpaid wages: A warning to employers

Victoria Quayle, ||

Employers are on notice that directing employees to complete work and failing to pay them for that work can carry significant consequences, even if the work is prior to the commencement of their contracted hours of work.

In a recent decision of the Federal Circuit and Family Court (Court), Aldi has been found to have underpaid employees in respect of work completed prior to the commencement time of their shifts.

Facts

By way of background:

  • The Shop, Distributive & Allied Employees’ Association (SDA) claimed that Aldi had required employees to clock on 15 minutes prior to the commencement of their shift to complete ‘pre-work’ tasks;
  • Aldi’s response was that it only required the employees to commence work when their scheduled shifts commenced;
  • Aldi further argued that the tasks prior to the commencement of the employees’ shifts under the relevant enterprise agreements were excluded from their contracted hours of work; and
  • Aldi conceded that it did require the employees to complete tasks prior to the commencement of their shifts and failing that the employees may be disciplined accordingly.

Findings

The Court rejected Aldi’s position that it only required its employees to commence their duties when their shift was scheduled to commence.

A key question for the Court was whether the tasks constituted ‘work’, and therefore whether an entitlement to wages flowed from that.

The Court found that the following tasks constituted ‘work’:

  • Walking to the materials handling equipment area;
  • Conducting pre-operational checks on stock pickers (i.e. a type of forklift);
  • Operating the stock pickers;
  • Picking up and checking a communications device; and
  • Recording various items in a sign in sheet.

In finding that the above tasks constituted ‘work’, the Court relied on the fact that they were “solely for the benefit of the employer” and “cannot be characterised as private activity in that they do not involve any activities that are of benefit to the employee”.

Accordingly, the Court directed Aldi and the SDA to confer and agree on the methodology for the determination and payment of compensation to the affected employees.

Key takeaways

The above decision is a stark warning to employers that they need to ensure that wages in respect of time for work completed needs to be paid.

It is not likely to be appropriate to request an employee to complete work and to then classify it as not being work within their contracted hours. Even “pre-commencement” work (that is, work completed before a shift is scheduled to commence in this case) will need to be carefully considered by employers with respect to:

  • What tasks are being requested to be completed;
  • How much time is spent completing those tasks;
  • When are the tasks commencing in relation to the scheduled start of work; and
  • Do the tasks benefit the employer, or is it a private activity that benefits the employee?

All of these factors/questions will be relevant to an employer in determining if it is ‘work’ and therefore wages need to be paid in respect of that work.

If you would like advice in respect of this issue, please do not hesitate to contact us.

Shop, Distributive & Allied Employees’ Association v Aldi Foods Pty Ltd [2022] FedCFamC2G 799 (30 September 2022)

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