Clayton Utz responds to underpayment reports

By Jerome Doraisamy|15 March 2021
Clayton Utz

BigLaw firm Clayton Utz has responded to reports that it underpaid graduate lawyers by thousands of dollars.

On Monday, 15 March, The Australian Financial Review reported that the firm had paid at least one employee approximately $30,000 below the minimum rate set by the Fair Work Commission in late 2019, which requires law firms – by way of a Legal Services Award – to conduct annual pay reconciliations and advise lawyers of maximum hours they can work under salary before they are entitled to overtime or penalty rates.

Some of the grad lawyers, AFR noted, were underpaid by $15,000, and most underpayments were under $5,000.

The reported underpayments by Clayton Utz follow similar incidents at Ashurst in January of last year, Gilbert + Tobin in July, and Herbert Smith Freehills in September.

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It also follows a submission by 13 law firms in May 2020 – including Clayton Utz – to add a new flexibility schedule to the Legal Services Award, which the firms argued was necessary to achieve the modern awards objective in the wake of the onset of the COVID-19 pandemic.

The proposed schedule would have, among other things, “allow[ed] permanent employees to agree to reduce their working hours to not fewer than 75 per cent of current hours” without displacing common rights for employers and employees to agree to changes.

It would also, the submission posited, have “provide[d] for increased operational flexibility by varying the minimum engagement for part-time and casual employees working from home and the spread of ordinary hours of work” for dayworkers at home, and allowed firms to direct staff to take annual leave in a week’s notice.

In a statement, a spokesperson for Clayton Utz said that the firm’s review of its payments was “comprehensive and largely completed” in 2020.

“With one or two exceptions (people we’re still trying to reach), all payments to legal graduates have been made. We’ve already worked through almost all of the eligibility for any other payments, which is limited to a small group,” the spokesperson said.

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“We take compliance with the [Legal Services Award] very seriously and we have measures in place to ensure people are not working excessive hours.”

At the time of the introduction of the new requirements, Lawyers Weekly approached Australian firms to ask if they would also look to monitor the hours performed by lawyers with one to three years’ PQE, in light of findings from the Legal Firm of Choice Survey that this demographic is the least satisfied of all legal professionals, with two in five lawyers at this stage intending to find a new employer.

Clayton Utz responds to underpayment reports
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