Louis Ha worked regular shifts on Friday and Saturday without penalties. Credit:Jason South The Fairfax probe points to underpayment of more than 250,000 workers through dozens of enterprise agreements - many excluding penalty rate payments. In a letter to union leaders, national secretary Gerard Dwyer explains how the SDA is now reviewing nearly 100 enterprise agreements in a bid to make them compliant with the Fair Work Act. He says a particular focus will be weekend and late-night penalties. He concedes that workers will "inevitably" have to be paid more "either through higher penalty rates or even higher base rates of pay". "If an employer does not agree to bargain, cancellation or termination of the agreement will be pursued," says Dwyer. It now appears that most of the SDA agreements in retail and fast-food sectors allow pay and conditions significantly below the award, depriving low-paid workers more than $1 billion during the last five years.

Former Woolworths employee Darcy Richardson resigned this year after finding his wage no longer covered his weekly bills. Credit:Wayne Taylor Industrial researcher Josh Cullinan, who helped expose the underpayments at Coles and elsewhere, said most workers at big retail or fast-food outlets are covered by SDA agreements - over half a million workers. "The majority of those workers are worse off," he said. Fairfax Media has obtained store rosters and pay slips for Hungry Jack's, Kentucky Fried Chicken (KFC) and Woolworths supermarkets, Australia's largest employer. Hourly pay at Hungry Jack's is barely above the award, with no provision for penalties and lower casual loadings. Credit:Mathew Lynn An analysis of four weeks of rosters at one inner Melbourne Woolies store shows 63 per cent of workers were paid less than the award, about $1070 for each affected worker. The shortfall is largely a result of low, or non-existent, night and weekend penalty rates. Many of the workers at the store are low-paid and part time, earning just $10,000 to $20,000 annually.

The figures indicate as many as 60,000 Woolies workers collectively underpaid by tens of millions of dollars a year. Darcy Richardson worked at Woolworths in inner Melbourne for almost a decade and resigned this year after finding his shelf-stacker wage no longer covered his weekly bills, including rent and groceries. He discovered he had been significantly underpaid shortly before he resigned. "An extra $30 a week would have helped me save more money. I wouldn't have had to live so precariously. It's an extra 1500 bucks a year. " Leaked rosters and payslips from a Hungry Jack's store in Melbourne's east indicate still worse underpayment. The Hungry Jack's agreement excludes penalties, and pays lower casual loadings. Hourly pay is barely above the award. An analysis by Cullinan shows one Hungry Jack's employee was underpaid about $5000 a year, while others were paid 30 to 40 per cent less than the award.

KFC payslips and rosters tell a similar story; no penalties paid, and casual loadings below the award. Until now the SDA has been reluctant to acknowledge problems with their deals. But in a statement to Fairfax Media it conceded there were issues with its KFC and Hungry Jack's agreements and was now bargaining for improved pay and conditions that would comply with the Fair Work Act. Louis Ha, a former KFC cook in Melbourne's west, worked regular shifts on Friday and Saturday without penalties. He was paid less than $13 an hour when he left in 2014. "We were treated terribly, to be honest. It would have helped me out a lot if I had been getting more pay for my weekends," he said.

In May 2015, Fairfax Media revealed a Coles deal with the SDA had cost workers tens of millions of dollars a year, mainly through sub-award penalties and low casual loadings and junior rates. Then, in an explosive ruling in May 2016, the full bench of the Fair Work commission found the Coles agreement failed the crucial test that workers under enterprise agreements must be "better off overall" compared to the award. Professor Stewart said the full bench ruling left a cloud over other SDA agreements and the scrutiny of them by the Fair Work Commission. "Once it (the Coles deal) was exposed it just seemed to be inarguable that these (other SDA) agreements would fail the better off overall test." An analysis of dozens of SDA agreements from the last decade shows a clear pattern of hourly rates paid from a few cents to a few dollars an hour above the award while penalty rates are slashed or non-existent. Every agreement analysed by Mr Cullinan and Fairfax Media reveals more than 50 per cent of workers were paid less than legal minimum rates. Most of the agreements should never have been approved by the Fair Work Commission.

The full-bench ruling has been deeply embarrassing to the commission and the union, and has proved very costly to employers. The SDA has repeatedly argued the full-bench decision on the Coles agreement involved a new interpretation of the Fair Work Act and better off overall test. But Professor Stewart, who helped draft the act for the Rudd government, rejected the union's claim and said the law was "crystal clear": every worker has to be better off when compared to the award. Josh Cullinan, the union official who exposed the dodgy deal between Coles and the SDA union. Credit:Penny Stephens West Australian single mother-of-three Tara McKenna, 42, worked night shifts at Coles for $22 an hour. She was paid tiny penalties, despite unsociable night hours. She would have earned much more under the award.

"On $22 an hour at Coles, it wasn't possible for me to keep up with any of my expenses. I have financial hardship arrangements with the utilities; with everything," she said. A KFC spokesman said for "many decades" it had worked constructively with the SDA. It defended not paying penalty rates. Its deal gives flexibility to workers and "provides KFC Australia with a flexible workforce." Woolworths in a brief statement said it would continue to meet its obligations under the Fair Work Act as it negotiated a new agreement. It did not respond to questions about underpayment of its workers. Hungry Jack's did not respond before deadline. The SDA has relied for decades on close relationships with employers. In return for moderate wage claims including concessions on penalties, companies have encouraged employees to join the SDA. The deals have made the SDA the biggest union in the ALP where it has been a potent opponent of social reform such as same-sex marriage. But the employer-union partnership is now in doubt.

On Saturday, Good Weekend will further detail the underpayment scandal and its history. Loading Do you know more? Contact us securely via Journotips Follow Ben Schneiders on Facebook