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Drakes settles for $2m in underpayment class action

Drakes, the independent supermarket business, has reached a settlement with the law firm leading a class action on behalf of staff allegedly underpaid between 2014 and 2020.

Subject to approval by the Federal Court, Drakes will pay $1.455 million to current and former managers who allege underpayment, along with a further $590,000 in penalties and interest.  

The liability may rise further with eligible staff allowed to register claims up until May 6.

The settlement resulted from mediation between the law firm Adero Law and Drakes that took place late last year.

Adero Law is running multiple class-action suits against supermarkets and other retailers, including a massive case against Coles and supermarkets that, together with Fair Work Ombudsman litigation, could run to almost $500 million. That claim impacts 28,000 staff of the two companies and is set to be heard over a seven-week Federal Court hearing in June next year. 

Last year, Woolworths agreed to a $50 million settlement over one case, but that was suspended and later abandoned after the court said it would not be approved – citing a concurrent case brought by the FWO.

When Adero Law launched the class action against Drakes two years ago it estimated about 1000 current and former staff of the retailer could be owed underpayments totalling as much as $20 million. 

Adero Law reached a settlement agreement with another independent grocery chain, Romeo’s Retail Group, last December. Both settlements will be ruled on by the Federal Cout on June 14. 

Meanwhile, the firm is pursuing a similar action against convenience store operator OTR.

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