Arora’s IGA direct faces $2m bill The SDA recently prosecuted a case against the former director of Arora’s IGA, Mr Arora, for failing to pay entitlements to employees including large by Mitchell Worsley, amounts of Industrial Officer superannuation.
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The SDA’s Federal Court case and the ATO’s Supreme Court case have resulted in penalties, interest and compensation of about $2 million, awarded against the director, Mr Arora, personally. In April 2010, Arora began to acquire IGA supermarkets, most of which were former Franklins supermarkets. By March 2013, Arora had purchased 20 IGA supermarkets across Sydney.
Failing to pay enƟtlements In May 2013, the SDA began to receive complaints from its members working in Arora IGA supermarkets that they had not been paid their superannuation entitlement. Between May 2013 and June 2014, the SDA attempted to resolve members’ complaints through discussions with the Arora Group. After raising these issues with the Arora Group, they would appear to catch up on superannuation payments, but within a few months would fall behind again. They also failed to pay other entitlements. Despite the SDA taking the company to the Fair Work Commission, the Arora Group refused to pay its employees their
non-working day public holiday benefit for Easter Sunday two years in a row. The Arora Group also deducted SDA members’ union fees from their pay, but did not pass on these fees to the SDA.
Arora Group insolvency In December 2014, the largest Arora IGA company went into administration. The other companies in the group followed shortly afterwards. Arora companies that were operating My Baby Warehouse also began to go into administration in December 2014. Workers of the Arora IGA and My Baby Warehouse companies were left with large amounts of unpaid superannuation, which they had little prospect of recovering.
Taking legal acƟon By July 2014, the SDA decided to commence legal action on behalf of SDA members working in Arora’s IGA. We instructed our lawyers to commence legal proceedings against the Arora Group. When the companies went into administration, the SDA decided to continue the legal action against Mr Arora himself, rather than the companies, for up to $450,000 in unpaid entitlements.
SDA wins case against Mr Arora The Federal Circuit Court declared that Mr Arora was in breach of the Fair Work Act and ordered him to pay a penalty of $75,000 in addition to other entitlements — now calculated by our lawyers to be more than $460,200 — to his former employees.