Law firm self-reports to Fair Work over underpayments, understated leave balances

One of Australia’s biggest law firms, Slater & Gordon, has identified a payroll error in leave accrual, which it believes has resulted in a collective underpayment of at least $300,000 for around 100 of its current and former employees.

National law firm Slater & Gordon has identified an issue regarding the rate at which leave was accrued for “at least” 100 of its current and former employees who took leave at half pay between late 2011 and mid-2023.

For those employees of the national plaintiff practice, the firm’s payroll system accrued leave on a pro-rata basis rather than leave accrual being calculated on a full-time basis.

Slater & Gordon believes that this error has resulted in a collective underpayment of at least $300,000.

The matter is now the subject of an independent review commissioned by the firm and has been self-reported to Australia’s workplace regulator.

In a statement provided to Lawyers Weekly, Slater & Gordon chief executive Dina Tutungi said: “We apologise for what has occurred. We know we have let our people down.”

Tutungi was appointed to the role of CEO in October of last year, taking over from John Somerville.

The firm will, she stressed, “repay the full entitlements of all those who were underpaid, with interest, and we will credit the leave balances of our current employees who have been affected”.

The firm believes, Tutungi continued, that the leave accrual errors took place between November 2011 and May 2023 and “disproportionately affected employees who have taken parental leave and elected to take this at half-pay”.

The issues with the system were first identified by the firm’s payroll team in May 2023, she explained, which “immediately corrected” the system configuration and informed its team leadership.

“An internal team undertook a complex and manual reconciliation of current and historical employee payroll and leave records, which was necessary to understand the nature and extent of the issue,” Tutungi said.

This reconciliation was completed in May of this year and is currently being verified by international advisory and investment firm KordaMentha, which the firm’s board has appointed to conduct a review of the national firm’s internal reconciliation, as well as independently investigate the “full extent of the issue”, including whether any other staff have been affected.

The firm has also, Tutungi said, self-reported the underpayments and understated leave to the Fair Work Ombudsman.

Moreover, it is liaising, she said, with the Australian Services Union (ASU) about the issues identified and how the firm is endeavouring to fix them.

“The ASU has been offered full transparency to ensure the union is able to satisfy itself that the reconciliation and remediation work is comprehensive and accurate,” Tutungi said.

The national plaintiff practice engages independent experts to undertake regular payroll compliance audits; “however, this error was not identified”, she said.

The identification of this issue follows the firm’s recent promotion of 42 lawyers, including three senior practice leaders and six practice leaders.

It also follows the firm’s takeover by private equity firm Allegro Funds and subsequent de-listing from the ASX, as reported extensively by Lawyers Weekly last year.

Tutungi said: “We know how important it is for the pay and entitlements for all our people to be correct, and we are committed to getting this right.”

The firm was founded, she proclaimed, to protect and defend workers’ rights. “Our people are driven by helping those who need it most,” she said.

“I am proud to lead them, and nothing will change our focus on delivering access to justice for our clients.”