Embattled Seven West Media is on the brink of facing a significant legal battle as employees prepare to launch a class action lawsuit. Staff members claim they have been systematically underpaid, potentially leading to a massive financial repercussion for the media giant.
Employment litigation firm Adero Law is spearheading the investigation into two major claims against the company, which owns the Seven Network. The law firm has already engaged with over 20 current and former employees of Seven and has requested access to several personnel files as part of its analysis.
Allegations of Underpayment and Misclassification
Caitlin McIvor, a senior associate at Adero, revealed to the Australian Financial Review that her team is preparing the potential lawsuit against Seven West Media, although it has yet to be filed. The allegations include underpayment, misclassification of roles, unpaid breaks, and the non-payment of overtime hours.
The first claim under scrutiny involves accusations that Seven paid some experienced journalists and producers a ‘Level Five’ salary, which is just one step above entry-level 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 extra pay was absorbed by the company as part of ongoing cost-cutting measures, which coincides with Seven’s financial struggles due to declining advertisement revenues.
Seven West Media’s Response and Financial Context
A spokeswoman for Seven West Media has refuted the allegations, stating, ‘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.’
The potential class action comes at a challenging time for Seven, which is already grappling with financial difficulties as advertisers increasingly shift their budgets from traditional media to streaming services and other digital platforms. Industry estimates suggest that Australian commercial broadcasters have lost approximately $650 million in advertisement revenue between 2022 and 2024.
Seven West’s chief executive Jeff Howard had pledged to reduce his networks’ costs by up to $30 million this year, the latest in a series of cost-cutting measures.
Implications of Federal Court Ruling
In parallel, Adero is examining whether a recent Federal Court ruling on backpay could have implications for Seven employees. Last month, the court ruled in an unrelated case that employers must maintain detailed timesheets for salaried staff, including overtime. This decision significantly increased backpay estimates for companies like Coles and Woolworths.
The decision saw Coles’ backpay estimates jump from $31 million to $250 million, while Woolworths’ increased from $486 million to $1.2 billion.
If Adero successfully proves that Seven violated the 2022 EBA, the company could face a substantial backpay bill, affecting approximately 1,200 employees who were part of the agreement.
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. Cassie Derrick, MEAA’s media section director, noted, ‘MEAA members have reported concerns that Seven could be dodging their obligations to give their staff a fair pay rise under their Enterprise Agreement.’
The potential class action against Seven West Media highlights broader issues within the media industry regarding fair compensation and employee rights. As the situation unfolds, it will be crucial to monitor how these legal and financial challenges impact the company’s operations and its workforce.
