Kmart Australia has been taken to the Federal Court with a class action lawsuit filed by thousands of salaried store managers who claim the retail giant has consistently failed to pay them for the hours they worked.
The class action was filed by Adero Law on Tuesday, with the claim filed by former Brisbane store manager Jordana Williamson as the applicant.
She claims she worked before and after work hours at the stores without any compensation as required under the Fair Work Act and claims she worked for about 60 hours a week during peak periods.
The class action is for all full time salaried store managers at Kmart stores across Australia for the past six years.
It is not for casual or hourly rate workers. The class action claims breaches of the General Retail Industry Award 2020.
The company said that Kmart’s business model depended on what it called a “deliberate failure” to keep track of the actual hours its managers worked.
It said that the store uses advanced technology to keep track of sales and stock across its network, but the company said it didn’t seem to be able to do the same for employee hours.
Adero Law said that the case meant that Kmart was now part of what it called a “trifecta” of Australia’s three largest private sector employers facing claims of underpayment.
The legal case comes in the wake of a landmark ruling by the Federal Court in September 2025, which established that Coles and Woolworths had illegally used annualized salary arrangements for their store managers.
In his ruling, Justice Perram established that employers could not use overpayments in a given period to offset underpayments in another.
This led to the establishment of the fact that all entitlements under the General Retail Industry Award need to be met in each individual pay cycle.
Employment law specialists have observed a sharp increase in class actions in wage compliance.
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This has been particularly observed in retail and hospitality businesses, where annualized salary arrangements for managers are common.
The legal landscape has also become much tougher. Since January 2025, intentionally underpaying employees has been a criminal offence in Australia.
This attracts a possibility of jail terms and heavy fines.
A spokesperson said that the company was committed to paying its employees fairly for the work they do, but because the case was still in court and Kmart hadn’t had a chance to look over the claims yet, they couldn’t say anything more.
The claim has yet to be proven and Kmart has yet to file a defense.
For the salaried managers who are at the center of this claim, it’s a simple case. They say that all they are asking for is to be paid the minimum award rate for every hour that they work.
