Employment class actions working overtime

However, 21 of those class actions are related claims filed by the Australian Salaried Medical Officers Federation against various public health service providers in Victoria. These claims are separate but connected, and relate to alleged unpaid, un-rostered overtime worked by junior doctors. Similar claims were also commenced on behalf of junior doctors employed in NSW and the ACT, which have both been settled.

Outside of those claims there are 4 other employee-related class actions during the review period, relating to unpaid overtime in the health and retail sectors, underpayments in the public sector, and 2 claims concerning sexual discrimination in the mining sector.

Many group members give rise to high settlements

In the review period, 4 settlements have been reached, ranging in total amounts between $545,000 and $229.8m. The parties in the Victorian junior doctors class actions referred to above have also reached an in-principle settlement of $175m.

Most of these total settlement sums are significantly greater than settlements reached in previous employment class actions. However, the substantial sums appear to be more attributable to the large numbers of group members, rather than increasing levels of individual entitlements.

Employment settlements from the review period

Sources

• Junior doctors - NSW^[1]
• Merivale^[2] - a claim for wage underpayments under the Hospitality Industry (General) Award 2010
• Junior doctors - ACT^[3]
• Stellar Personnel^[4] - a claim by black coal miners engaged as casuals for annual leave entitlements

Expectations for the year ahead

On 5 September 2025 a major decision was handed down in the Federal Court involving 2 regulatory proceedings brought by the Fair Work Ombudsman (FWO), and 2 class actions commenced by nearly 30,000 employees, against Woolworths and Coles.^[5] All of those claims arose from alleged underpayments to store-based management employees by reference to the General Retail Industry Award 2010.

In 2021, the FWO commenced legal action in the Federal Court against Coles and Woolworths in relation to the alleged underpayment of their salaried employees. Class actions were also commenced on behalf of salaried employees – the Baker proceeding against Woolworths and the Pabalan proceeding against Coles.

All 4 proceedings required determination of a common issue, being the proper characterisation of annualised salary arrangements and related set-off clauses in the relevant employment contracts. The salary arrangements sought to set-off against the annual salary any payments which those employees would otherwise be entitled to receive under the award (such as for overtime, weekend and public holiday rates and allowances) across different pay periods. These types of annual salary arrangements are very common and have been routinely adopted by employers in many industries.

The Court found that those salary arrangements did not operate as Woolworths and Coles had intended. As a result, and despite paying those employees above award rates, Woolworths and Coles nonetheless had to make award related payments to those employees calculated within the single pay period. Critically, set-off could not be effected between pay periods.

This decision will have far-reaching implications for retail based and other employers who rely on annualised salary arrangements which, up until now, had been standard practice. While the decision may yet be appealed, we expect to see a rise in the number of class actions seeking to recover alleged underpayments for employees and for those class actions to seek recovery for a broader range of employees, including management based and professional level employees who traditionally receive an overall salary in lieu of award specified amounts.