Flight Centre hits back at union over underpayment scandal

Melbourne, Australia: April 12, 2018: Street view of a Flight Centre shop window. Flight Centre is Australia’s largest travel agency selling international flights, holidays and tours. A man walks past.
By Alexandra Coulton


Flight Centre’s union spat over underpayment claims has developed, with the agency defending its stance.

The travel giant is embroiled in a Federal Court battle with a union representing five agents who allege missed payments on overtime and minimum rates to the tune of $250,000 since 2012.

The Australian Services Union (ASU) hit Flight Centre with Federal Court action based off an investigation of employee records which revealed the agency failed to pay minimum wages, penalty and overtime rates, annual leave and leave loading at the correct rate to the five employees who have come forward, and did not provide the correct rest and meal breaks, according to union.

Flight Centre has defended the case and claims its employees received “more than award entitlements”, according to The Australian Financial Review (AFR), and its defence stated staff were properly reimbursed via a package including retainers and commissions or incentives.

The union rejected Flight Centre’s stance, countering that the incentive payments did not correlate to the entitlements arising under the award.

“Upon the proper construction of the contracts of employment, the incentive payments could only be offset against any award entitlement which was of the same nature,” the union’s legal reply said, according to the AFR.

“You can’t offset commissions against what you’re entitled to under an award,” Giri Sivaraman from Maurice Blackburn, the union’s legal representation, said at a press conference in April.

“And with the top-ups, they’re random, inconsistent payments, there’s no rationale, we don’t understand when they’re paid and whether you actually get up to the award level anyway.”

The news comes as Flight Centre’s US subsidiary faces legal action from the trustee of the failed Fyre Festival, which is seeking to reclaim around $179,00 over travel arrangements it alleges the group never provided.

A Flight Centre spokesperson told Travel Weekly that the company will defend the case.

“We were asked to book travel-related [services] to the event, which we did,” the spokesperson said.

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