Pre-shift “work” to cost Aldi millions, claims SDA

The Shop, Distributive & Allied Employees’ Association (SDA) claims Aldi supermarkets owes approx. 4000 employees up to $10 million in backpay after Judge Humphreys of the Federal Circuit and Family Court ruled that a series of “pre-commencement activities” employees were expected to perform each day constituted “work”, meaning “the time taken to perform those tasks is liable for payment by the employer”.

This article contains updated information as of 30 October 2023 – see below.

The SDA claimed that from August 2018 onwards, Aldi directed employees at their distribution centre in south-west Sydney to work in excess of their contracted (paid) hours, by requiring them to commence work 15 minutes prior to their rostered starting time. The tasks employees were required to perform prior to the commencement of paid working hours included: walking to a materials handling equipment area, locating and then undertaking various safety checks on stock pickers (a forklift type vehicle), driving the said vehicle some distance to a central location, picking up and checking a communication device, recording various things on a sign in sheet, and then commencing the shift by undertaking a group physical warm up and a toolbox talk.

Aldi did not dispute that employees were required to perform these pre-shift tasks but disputed the amount of time required to attend to the duties – producing CCTV footage confirming one employee successfully completed his tasks in as little as 5.5 minutes – and argued that “employees are only expected to be ready to commence work at the start of the rostered shift” meaning payment for the pre-shift tasks is not required. Aldi also advanced that the pre-shift tasks were sanctioned by the employer’s 2017 and 2020 enterprise agreements, which the SDA was a party to, insisting the SDA had never previously disputed the employer’s “custom and practice” approach that the pre-shift tasks did not form part of employees’ contracted (paid) hours.

Judge Humphreys determined in favour of the SDA, confirming that neither the “fact that it may have been the [employer’s] understanding that the pre-commencement tasks did not form part of the contract hours” nor that the SDA had not agitated the issue during the negotiation of previous agreements barred the union from bringing the present claim.   

In finding that the pre-shift tasks constituted work for which the employees were entitled to be paid, Judge Humphries observed that none of the stipulated activities could be characterised as “private activity in that they do not involve any activities that are of benefit to the employee, such as storing of personal effects, putting on uniforms or PPE”. Instead, Judge Humphries confirmed that the pre-shift tasks were, “solely to the benefit of the employer” adding that, “in these circumstances, the Court is satisfied that the activities carried out constitute work”. 

Judge Humphries was satisfied “that there was a clear implied direction that employees had to arrive early, prior to the shift commencing, in order to undertake the pre-commencement tasks” or they would incur disciplinary action – a point conceded by Aldi – but His Honour was not able to conclude there was a clear requirement that employees had to arrive “15 minutes” early. Judge Humphries assessed the “average time” taken to complete the pre-shift tasks was 10 minutes, contrary to the employer’s claims.

The parties have been instructed to “confer and agree, if possible, on a methodology for the determination and payment of compensation” to employees. The Court will determine the manner of calculation of compensation if they fail to reach agreement, with the SDA suggesting workers are owed “millions”.

Shop, Distributive & Allied Employees’ Association v Aldi Foods Pty Ltd [2022] FedCFamC2G 799 (30 September 2022)

UPDATE – October 2023

After the SDA lodged a class action in the Federal Court on 27 October 2023, Aldi communicated with its workforce confirming its intent, within the week beginning 30 October, to make “pay adjustments” to honour any amount found to be owing following an external audit which examined 10,000,000 shifts performed by store employees. The audit, which was intended to “calculate adjustments that might be required for any work that may have been done outside rostered shift times”, had been in progress since March 2023. Details regarding the payments will follow in the coming weeks with Aldi reportedly assuring employees, “we have amended our processes to ensure that employees are [now] paid based on punch times”.

The response by Aldi appears to be too little, too late for the SDA, who launched the class action seeking compensation for all Aldi employees – estimated to encompass more than 20,000 former and current staff members – noting that following Judge Humphries decision of a year ago, Aldi “had its chance to do the right thing” but, the employer has since “failed to rectify this and adequately compensate workers”.

SDA National Secretary, Gerard Dwyer, has been quoted as saying that Aldi now has to “face the consequences of these breaches” estimating the “average worker” will be eligible for about $7,500 in compensation, or up to $150 million in total for the group.