Ashurst will make back payments to junior staff in Australia after an internal audit concluded that a number of staff had been underpaid.
Firms in Australia have been carrying out reviews into past remuneration for junior staff amid changes by the Fair Work Commission (the tribunal of Australian workplaces) to increase scrutiny into alleged overwork and underpayments in the legal industry.
The Australian Legal Services Award 2010 sets out minimum pay rates that firms must pay paralegals, law graduates (trainees) and other non-qualified legal staff on annualised salaries. The rate is calculated on hours staff have actually worked, not billable hours.
From March this year, Australian law firms will be under an obligation to keep records of start and finish times, along with any unpaid breaks, of its junior staff to check they are receiving the minimum hourly rates under the award.
Linda White of the Australian Services Union (the union for legal staff and lawyers in Australia) told RollOnFriday that the new requirement to record time was necessary as “law graduates, junior lawyers and law staff generally are sick and tired of working long hours for no extra pay". She said that some junior staff “could make more money stacking supermarket shelves" based on "ridiculous hours" and working at weekends.
An Ashurst spokeswoman confirmed to RollOnFriday that "a number of staff" were identified as being "owed additional payments" following "a full and thorough review", independently verified by Deloitte "of all payments made to award-covered staff against hours worked". The firm ensured all necessary adjustments were made to current and former staff affected "including interest, superannuation and leave balances adjusted where applicable" said the spokeswoman.
Ashurst's spokeswoman added that the process was almost complete and the firm had "made the necessary changes to ensure, moving forward, all payments owed to our staff for work performed are properly accounted for and made on time”.
It remains to be seen whether other firms will join Ashurst in making back payments to junior staff.
RollOnFriday spoke to a number of Australian firms* all of whom confirmed that they had undertaken or were undertaking reviews into this and that no instances of non-compliance had so far been found.
Herbert Smith Freehills and Allens would not comment, although insiders at both firms said that reviews had been undertaken with no instances of underpayment identified.
* Allen & Overy, Norton Rose Fulbright, Gilbert + Tobin, King & Wood Mallesons, Piper Alderman, K&L Gates