Woolworths admits underpaying staff up to $300M

Supermarket giant Woolworths has admitted underpaying thousands of its workers as much as $300 million over the past decade, in what is believed to be the biggest such case on record in Australia.

Woolworths said it discovered about 5,700 salaried staff across its supermarkets and Metro stores had not been paid in full as set out in the General Retail Industry Award (GRIA).

In a statement, the Fair Work Ombudsman (FWO) said it is shocked that yet another large, publicly listed company has today admitted to breaching Australia’s workplace laws on a massive scale.

Woolworths joins Wesfarmers, Qantas, Commonwealth Bank, Super Retail Group, Michael Hill Jewellers and many others in failing to ensure that staff are receiving their lawful entitlements.

Ombudsman Sandra Parker said the FWO will conduct an investigation in relation to Woolworths’ self-disclosure and hold them to account for breaching workplace laws.

Parker also expressed frustration at the upsurge in large-scale businesses admitting that they did not classify staff correctly, pay overtime or penalty rates, or complete annual pay reconciliations where they are required.

“Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff. Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” said Parker.

“It is particularly concerning that many of these corporates have enterprise agreements in place that they negotiated but then failed to properly uphold the minimum standards.

“These sorts of careless missteps by business can be costly, often running up into the millions of dollars across an entire workforce.”

Parker said that the non-compliance identified within many of these companies is caused by ineffective governance combined with complacency and carelessness toward employee entitlements.

“If companies do not prioritise workplace compliance from the outset, it can take significant resources and time to fix, particularly where companies do not have accurate records of times worked and wages paid. It is not surprising that workers lose trust in their company when this happens,” she said.

Parker reminded business of the broader reputational risk of breaching workplace laws, which can have a lasting impact on the bottom line.

“We encourage corporates to cooperate with us to rectify breaches, but they must understand that admission is not absolution. Companies should expect that breaking workplace laws will end in a public court enforcement outcome.”

“I intend to take this issue up with Boards around the country, because frankly that is the level within organisations that should be taking an active leadership role on this issue, and seeking assurance about compliance from executive managers.

“Companies and their Boards are on notice that we will consider the full range of enforcement options available under the Fair Work Act, including court enforceable undertakings and litigation where appropriate.”