Embattled Seven West Media may soon confront a significant legal challenge as staff members prepare to launch a class action lawsuit, alleging systematic underpayment over several years. The potential lawsuit, spearheaded by employment litigation firm Adero Law, targets the media giant behind the Seven Network. This development comes amid growing concerns over employment practices within the company.
Adero Law is currently investigating two major claims against Seven West Media. As part of this process, the firm has engaged with over 20 current and former employees, scrutinizing personnel files to build their case. Caitlin McIvor, a senior associate at Adero, revealed to the Australian Financial Review that while the lawsuit is still in preparation, the accusations are serious and multifaceted.
Allegations of Underpayment and Misclassification
The primary claim under investigation centers on allegations that Seven West Media paid some of its experienced journalists and producers a ‘Level Five’ salary, which is only slightly above the entry-level pay for cadet journalists. According to the enterprise bargaining agreement (EBA) settled in 2022, the base rate for a Level Five employee ranges from $55,100 to $65,500, with additional loading for extra hours worked.
However, some staff members allege that their additional pay was absorbed by the company as part of cost-cutting measures, effectively negating any pay rise. These accusations are compounded by claims of misclassification of roles, unpaid breaks, and non-payment of overtime hours, painting a troubling picture of the company’s employment practices.
‘Seven West Media is confident it is paying its news and current affairs employees appropriately and in line with the enterprise agreement and legislative obligations,’ a spokeswoman for Seven West stated, firmly rejecting the accusations.
Impact of Recent Federal Court Ruling
In addition to the underpayment claims, Adero is examining the potential implications of a recent Federal Court ruling on backpay, which could significantly impact Seven employees. The court’s decision in an unrelated case emphasized the necessity for employers to maintain detailed timesheets for salaried staff, including overtime. This ruling has already led to substantial increases in backpay estimates for companies like Coles and Woolworths.
Coles’ backpay estimates surged from $31 million to $250 million, while Woolworths’ estimates jumped from $486 million to $1.2 billion following the ruling.
If Adero Law can demonstrate that Seven West Media violated the 2022 EBA, it could result in a massive backpay liability, affecting approximately 1,200 employees who were part of the agreement.
Financial Struggles and Industry Challenges
The potential class action comes at a challenging time for Seven West Media, which is already grappling with financial difficulties. The company has been hit hard by a shift in advertising revenue, as advertisers increasingly favor streaming services and other digital media channels over traditional broadcasting.
Estimates suggest that Australian commercial broadcasters, including Seven, lost around $650 million in advertisement revenue between 2022 and 2024 alone.
In response to these financial pressures, Seven West’s chief executive, Jeff Howard, has committed to reducing network costs by up to $30 million this year, marking the latest in a series of cost-cutting measures.
Next Steps and Industry Reactions
The Media Entertainment and Arts Alliance (MEAA) is scheduled to meet with Seven workers next Wednesday to discuss a new three-year EBA. The meeting will address concerns that the company may be circumventing its obligations to provide fair pay rises under the current enterprise agreement.
‘MEAA members have reported concerns that Seven could be dodging their obligations to give their staff a fair pay rise under their Enterprise Agreement,’ stated Cassie Derrick, MEAA media section director.
As the situation unfolds, the potential class action against Seven West Media could serve as a pivotal moment, not only for the company but also for the broader media industry, highlighting ongoing challenges in employment practices and financial sustainability.
