Kmart Managers Sue for Millions Over Unpaid Overtime in 2024

Kmart is being sued by its own managers for millions of dollars over unpaid overtime. This comes as Kmart also faces scrutiny over its supply chains.
By Newsroom | Business, Law |

Salaried Managers Allege Systematic Underpayment and Overwork

A class-action lawsuit has been filed against Kmart by salaried store managers who claim the retail giant systematically underpaid and overworked them to reduce costs. The allegations, lodged with the Federal Court by law firm Adero Law, assert that managers were frequently required to perform work beyond their contracted and paid hours without receiving overtime, penalty rates, or mandated allowances. The legal action, representing managers who have worked for Kmart within the last five years, focuses exclusively on salaried store managers, not casual or part-time staff.

Kmart hit with a massive class-action lawsuit by staff who claim they were treated unfairly by the retail giant - 1

The core of the complaint revolves around the alleged failure of Kmart to comply with the Fair Work Act and relevant industry awards over the past six years. Lead applicant Jordana Williamson, a former store operations manager in Brisbane, claims Kmart's internal payroll systems consistently underestimated the actual workload required to effectively manage stores. Some managers reportedly worked up to 60 hours a week during busy periods without additional compensation, contributing to them being significantly "out of pocket."

Read More: Businesses Use New 'Context Engineering' to Make AI Agents More Reliable

Kmart hit with a massive class-action lawsuit by staff who claim they were treated unfairly by the retail giant - 2

Kmart has stated that it is "committed to its team members being paid correctly for the work they perform." However, the allegations have not yet been proven in court, and Kmart has not yet filed a defence. Adero Law is offering "no win, no fee" legal services to eligible claimants and is inviting interested parties to register their interest. Participants retain the right to opt-out of the class action.

Kmart hit with a massive class-action lawsuit by staff who claim they were treated unfairly by the retail giant - 3

Supply Chain Under a Cloud of Forced Labour Allegations

Separate legal proceedings are also scrutinizing Kmart's supply chains, with accusations that the retailer may have sourced goods from factories linked to forced labour, specifically concerning the Uyghur ethnic group in China. This case, initiated by an Australian-based Uyghur group, seeks to obtain documents to determine if Kmart knowingly profited from suppliers using forced labour. This action highlights perceived weaknesses in Australia's current 'Modern Slavery Act,' which, unlike legislation in the US and EU, requires companies only to report on supply chain risks rather than actively banning imports made with forced labour or mandating corrective actions.

Read More: AI Training Copyright Lawsuits Cause Legal Fights in US and Europe

Anti-slavery advocates and legal experts argue that Australia's seven-year-old modern slavery laws are falling behind global standards and urgently need strengthening. They suggest the current reporting-only requirement leaves the onus on the public to pursue legal action against companies based on suspicions of modern slavery. Kmart has denied these supply chain allegations and expressed disappointment with the legal action, stating the issues raised are not unique to their company.

Frequently Asked Questions

Q: Why are Kmart salaried managers suing Kmart?
Salaried store managers are suing Kmart in a class-action lawsuit. They claim the company made them work too many hours without paying them extra for overtime or penalty rates, which they say is against the law.
Q: How many hours did Kmart managers allegedly work without extra pay?
Some Kmart managers claim they worked as much as 60 hours a week during busy times. They say they were not paid for this extra time, which left them out of pocket and overworked.
Q: What does Kmart say about the unpaid overtime claims?
Kmart has said that they want to make sure their team members are paid correctly for the work they do. However, the court has not yet proven these claims, and Kmart has not yet given its official answer to the lawsuit.
Q: Are there other legal problems for Kmart besides the manager lawsuit?
Yes, Kmart is also being investigated for its supply chains. A group says Kmart might have bought goods from factories that use forced labour, especially involving the Uyghur people in China.
Q: What is the issue with Kmart's supply chains?
An Australian Uyghur group has started a legal case to find out if Kmart knew about or profited from suppliers using forced labour. This raises questions about Australia's modern slavery laws, which are seen as weaker than those in other countries.
Q: What is Kmart's response to the forced labour allegations?
Kmart has denied the claims about forced labour in their supply chains. They said that the problems mentioned are not unique to their company and expressed disappointment with the legal action.