More than 7000 staff members across David Jones and Country Road have been underpaid $3.7 million over the last six years, according to the businesses parent company Woolworths Holdings.
The payment error was found in late 2019, and a subsequent audit blamed the issue on rostering and payroll system errors. The SDA, ATO and Fair Work Ombudsman have been notified, and that staff will be repaid by mid-October.
David Jones interim chief executive Ian Moir apologised, and said the business' employees should have been able to expect they would be paid correctly.
"We deeply regret this has not occurred and apologise unreservedly to our team," Moir said.
"We are now focused on ensuring our team members are paid the money owing to them as quickly as possible."
Country Road chief executive officer Scott Fyfe said the business has taken the necessary steps to ensure the errors cannot be repeated.
And while the amount of money pales in comparison to some other high profile underpayments, such as supermarket Woolworths, the financial hit of repaying staff will come at a crucial time for David Jones - which has been haemorrhaging money over the last few years while undergoing a critical restructure.
In August the business flagged asset impairments in its store fleet due to the impact of Covid-19, and in May said it would accelerate the right-sizing of its store network. And while the business has spent millions over the last several years renovating its Elizabeth Street flagship to be a home of luxury, Australians are likely to be more careful with their money and focusing on essential purchases - with the country entering its first recession in nearly 30 years.
Gerard Dwyer, national secretary of the Shops, Distributive and Allied Employees Union, said the SDA will work with David Jones and Country Road to ensure all entitlements are paid in full, and that the announcement confirms the union's pleas last year that all retail firms conduct full and diligent payroll audit.
"Many retailers have done the right thing and conducted payroll audits, but it should not be this way," Dwyer said.
"All companies need to properly invest in their payroll systems to ensure there is no repeat of the long chain of underpayment announcements we have seen in the last year and a half [and] all workers are entitled to expect their legal minimums are being adhered to."
