Five Flight Centre employees are today beginning a Federal Court case against the business, alleging they have been underpaid $200,000.
Maurice Blackburn Lawyers said the “landmark” case – related to pay structure and bonuses – could have ramifications for thousands of current and former employees.
The travel agency told Australian Aviation in response the claim is “not sustainable” and it is defending the matter.
Lawyer Giri Sivaraman, who is leading the case, 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.”
The employees are bringing the case in conjunction with the Together Union. Branch secretary Alex Scott said Flight Centre ran a “calculated and deliberate system that relied on commissions to drive down the wages of its workers”.
Flight Centre said in a statement, “It’s not appropriate for us to comment in detail about a pending court case. Flight Centre believes the claims for compensation in these proceedings, which are being brought by five former employees, are not sustainable and is defending the matter.
“This matter relates to Flight Centre’s past wage model prior to our EBA being rolled out in October 2019 so it does not impact our current wage model.”
The start of the case comes a week after the same legal firm, Maurice Blackburn Lawyers, is set to take Qantas to the Federal Court over its decision to outsource ground-handling jobs.
The TWU has even enlisted the heavyweight lawyer who helped win the infamous Waterfront dispute, Josh Bornstein, to lead the case.
If successful, a potential ruling could have major ramifications for other businesses hoping to outsource roles.
It comes after Qantas earlier rejected a proposal by the TWU to retain the jobs in-house, arguing it simply didn’t save enough money compared with bids from third-party providers.
Qantas’ plans will see the airline brand remove operations at the 10 Australian airports where the work is done in-house, which includes Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville.
Maurice Blackburn principal Josh Bornstein said the legal challenge would put outsourcing on trial.
“If Qantas can replace thousands of its employees with cheaper, insecure labour-hire employees then this can happen to any other employee in any Australian workplace,” said Bornstein.
The airline in response accused the TWU of not telling the truth and denied it had abused JobKeeper subsidies.