Australian Workers Say They Are Being Shafted By Chemist Warehouse, Again

Young workers at one of Australia’s largest pharmacy retailers say they were railroaded out of thousands of dollars of pay over the Summer, after working shifts under stringent COVID protocols through the peak of Australia’s Omicron wave. 

As February draws to a close, these frontline workers – who have attracted the praise of politicians ad nauseam for their role in the nation’s economic rebound – say they are still waiting to be paid.

Olivia, a 21-year-old shop assistant at one of Chemist Warehouse’s franchise stores in Victoria, is one of them. She first grew suspicious of her shrinking pay packet in December last year, when Chemist Warehouse, like a handful of other retailers across the country, had run into trouble with its payroll software.

With payroll seemingly out of action, scores of workers weren’t being paid. Olivia’s area manager suggested she and the rest of her team fill out a manual pay request and return it to them, so the accounts team could process all of their wages manually. 

“There were a couple of issues with that,” Olivia told VICE. “[My area manager] would sometimes not punch in the right number [of hours worked], which meant we would then have to email payroll ourselves to get that resolved.”

Olivia claims her manager refused to communicate with each of the staff members directly. Instead, she says, all of the murkiness involved with getting paid for the work she had already done was trapped in an email thread only accessible by the computer inside the store where she worked.

“So, if you weren’t working that day, you wouldn’t see it. And it would be like, ‘You have to submit the correct hours by 9pm tonight’,” she said. 

It’s no exaggeration. 

In emails seen by VICE, one harried middle manager at Chemist Warehouse emailed the store around 2pm, presumably while employees were working on the shop floor, and ordered all staff to pore over their payslips, spot all errors, and have “all forms submitted back to us by 9:00PM TONIGHT!”, highlighted in fluro yellow.

By January 6, matters had only worsened. Some staff had struggled to pay rent, while others had to borrow money from family just to grab a bite to eat or cobble together the most basic of essential items. One worker in the same region told VICE that, even at this point, they felt they were a “volunteer” workforce.

“We really started to lose hope,” she said.

In a smattering of payslips seen by VICE, the results of this pay period appear to have vindicated the workers’ concerns. Not only were the hours worked noted on payslips inaccurate enough for the underpayment to be felt, some were slashed in half or worse. Penalty rates were nowhere to be seen. Queries sent to managers of various tiers were received with tepid condolences: “Apologies for the inconvenience again.”

As the end of January started to near, Chemist Warehouse workers from across Victoria began to grow frustrated. Staffers had no idea how to contact their HR department and told VICE they felt like their managers were avoiding them. Contacting the payroll team themselves started to seem like a never-ending nightmare. Workers felt stuck.

Josh Cullinan, the secretary of the Retail and Fast Food Workers Union, thinks both the alleged underpayment and the perceived reluctance of Chemist Warehouse managers to reach a resolution with frontline workers could almost be described as a feature of the retailer’s corporate design.

“We know Chemist Warehouse is well aware of the industrial rights of workers. We have represented workers in Perth who were not paid penalty rates, we believe unlawfully, by way of a complex ownership structure where Chemist Warehouse were “sole trader” employers in Perth Chemist Warehouse stores,” Cullinan said.

“They know what they’re doing. They roll out these bizarre industrial tactics to avoid paying penalty rates. These aren’t [amateurs], and they’re just trying to save however many thousands they do on penalty rates,” he said.

“It’s outrageous.”

Chemist Warehouse did not respond to a request for comment from VICE in time for the publication of this article. 

The pharmacy retailer is one of Australia’s largest privately-owned companies, and commands about 20 percent of the nation’s $21.8 billion pharmacy market. It has grown from the five original Chemist Warehouse stores it had back in 1995 to the more than 400 franchise outlets it has today. The franchisees now include the namesake Chemist Warehouse stores, My Chemist, ePharmacy, and My Beauty Spot, among others. 

Over the last year, the company has been trying to drum up investor interest to take the business public. In April last year, the Australian Financial Review reported that a group of fund managers were invited to dinner at Sydney’s frothy Rockpool to get an update from the company. A hard sell. Just a few months earlier, the company’s financial advisors, Rothschild, sent formal requests to every bank in the market, trying to sell the allure of the company’s potential and convince major backers to contribute to the group set to float an initial public offering.

Last year, analysts suggested that if the company were to go public, it could score a market valuation of $5 billion. Talk of a public offering, though, has since fizzled out. Workers are, understandably, frustrated to have to fight for the money they claim they’re owed. 

And this isn’t the first time the pharmacy giant has attracted criticism for shafting its workforce. 

In 2019, workers at three of Chemist Warehouse’s major distribution centres went on strike in the face of low pay and the company’s heavy reliance on contractors. At the time, strikers even accused the company of getting people to intimidate them for taking industrial action. 

One striker in March 2019 said she had her tires slashed. Another called the police to report violence directed at the picket line. Chemist Warehouse’s director, Damien Gance, said he “expressly and unequivocally” denied allegations of any violence or unlawful conduct directed at the picket line.

Some workers who spoke to VICE claimed these types of alleged tactics, though perhaps with less of a violent tilt, are still being used to swindle workers out of truckloads of cash. Cullinan said he had seen his fair share of run-ins with the group on the Federal Court circuit, too. 

For Olivia and her colleagues, though, legal action doesn’t seem like a viable option. Most of the workers impacted by the recent bout of wage discrepancies are under the age of 25. They’re casual workers, usually studying, trying to live a little. One worker said she wouldn’t even know where to start. 

Even still, one of Olivia’s colleagues had a swing and got halfway there. 

In a complaint submitted to the Fair Work Ombudsman (FWO) seen by VICE, the Chemist Warehouse staffer tried to lay all the issues bare in an effort to find a way forward. 

“They have withheld public holiday rates and penalty rates from staff for the month of December,” she said. “[They have] incorrectly paid our hourly rates for the month of January,” she continued. “When enquired [to], their answer[s] are ambiguous and do not give us a timeline on when staff can expect their back pay.”

The complaint raised more questions than it answered. 

In response, an employee working the ombudsman’s hotline told the worker that she had just been underpaid all along. She was undertaking duties, like opening and closing her store, that were above her pay-grade. While it was only a difference of a dollar an hour, “it all adds up.”

Later, the FWO worker shared a resource with her: “The Employee's Guide to Resolving Workplace Issues”. It would have been helpful – if she had an HR representative to direct her complaint to. But she still doesn’t. 

A spokesperson for the FWO told VICE that a formal dispute between this worker and Chemist Warehouse hasn’t been officially opened. But the spokesperson encouraged her, and all others who claim they are experiencing similar working conditions to lodge formal complaints. 

According to the FWO, Chemist Warehouse was forced to enter a compliance partnership with the ombudsman in 2016, after 342 separate complaints were filed against the retailer. In October 2020, the pharmacy giant came to the table and back-paid 118 employees a total of $99,000. 

Olivia isn’t sure she’ll have the same luck, and, like one of her colleagues, feels like she’s “volunteering”. She doesn’t hold much hope for being paid. If she didn’t have other casual jobs on the go as well, she isn’t sure what she would do.

Young workers who need workplace assistance can visit the Fair Work Ombudsman’s website or call the Fair Work Infoline on 13 13 94 for free advice.

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