Embattled Seven West Media is on the brink of facing a significant class action lawsuit from its staff, who allege systematic underpayment over several years. This potential legal battle is being spearheaded by employment litigation firm Adero Law, which is investigating claims against the company that owns the Seven Network.
Adero Law has reportedly engaged with over 20 current and former employees of Seven, analyzing personnel files as part of its investigation. Caitlin McIvor, a senior associate at Adero, confirmed to the Australian Financial Review that her team is preparing the lawsuit, though it has yet to be filed. The allegations include underpayment, role misclassification, unpaid breaks, and lack of overtime compensation.
Allegations of Underpayment and Misclassification
The core of the first claim under investigation revolves around accusations that Seven paid some experienced journalists and producers a ‘Level Five’ salary, which is only slightly above the entry-level salary for cadet journalists. The base salary for a Level Five employee ranges from $55,100 to $65,500, with additional loading for extra hours worked, as outlined in the enterprise bargaining agreement (EBA) settled in 2022.
However, some staff members allege that their ‘personal margin’ was reduced as the base salary increased, effectively negating any pay rise. This alleged absorption of extra pay is seen as part of Seven’s broader cost-cutting measures amid declining advertisement revenues.
A spokeswoman for Seven West Media has denied the accusations, 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.”
Impact of Recent Federal Court Ruling
In a parallel development, Adero Law is examining the implications of a recent Federal Court ruling on backpay, which could potentially impact Seven employees. Last month, the court ruled in an unrelated case that employers must maintain detailed timesheets for salaried staff, including overtime. This decision led to significant increases in backpay estimates for companies like Coles and Woolworths, with figures jumping from $31 million to $250 million and $486 million to $1.2 billion, respectively.
If Adero Law successfully proves that Seven violated the 2022 EBA, the company could face a substantial backpay bill affecting approximately 1,200 employees.
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 as advertisers shift their focus from traditional media to streaming services and digital platforms. Industry estimates suggest that Australian commercial broadcasters 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, continuing a trend of cost-cutting measures.
Future Negotiations 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. MEAA’s media section director, Cassie Derrick, expressed concerns about Seven potentially evading 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,” Derrick stated.
As the situation unfolds, the outcome of this potential class action could have far-reaching implications not only for Seven West Media but also for the broader media industry, setting a precedent for employment practices and compensation standards.
