Australia's workplace watchdog is considering litigation against the country's largest retail conglomerate, Wesfarmers, after it revealed it has underpaid workers $15 million over the past nine years.
In a statement on Tuesday, Wesfarmers said it found the mistake when it was updating a payroll system in its industrial and safety division, causing about 6000 current and former team members to have been underpaid since 2010.
Managing director Rob Scott at the Wesfarmers' 2018 annual general meeting.Credit: Richard Wainwright
The underpayments affect staff at retailer Blackwoods, workwear manufacturer Workwear Group, industrial gas supplier Coregas and health and safety management company Greencap. The errors relate to staff allowances, superannuation and entitlements, with Wesfarmers specifically highlighting car expenses.
Wesfarmers reported the non-compliance to the Fair Work Ombudsman, however in a statement, Ombudsman Sandra Parker said this was not good enough.
"The Fair Work Ombudsman will be holding Wesfarmers to account after self-disclosing significant underpayments of its workers. Each week, another large company is publicly admitting that they failed to ensure staff are receiving their lawful entitlements. This simply is not good enough," Ms Parker said.
"Companies and their boards are on notice that we will consider the full range of enforcement options available under the Fair Work Act, including litigation where appropriate."
Just last Thursday, Wesfarmers announced it had underpaid staff at its Bunnings hardware chain superannuation entitlements for nearly 10 years. The Age and The Sydney Morning Herald understands the two cases are unrelated to each other.
Wesfarmers is working with auditor PwC to repay workers.
"These were inadvertent errors but they are deeply regrettable and we apologise sincerely and unreservedly to our team members who have been affected over a number of years," Wesfarmers Industrials managing director David Baxby said in a statement.
"Our priority is to back-pay all affected team members as quickly as possible, including interest, to ensure affected team members are fully compensated. We are also investing heavily in our payroll system, processes and capabilities to fix this issue and ensure it cannot happen again."
Wesfarmers' managing director of industrial David Baxby.Credit: Trevor Collens
Following the Bunnings' underpayment federal Opposition Leader Anthony Albanese said the company had committed "wage theft", and called on the Morrison government to address the issue of worker underpayment.
"It is a good thing that the Bunnings workforce are going to receive their entitlements but how is it that this was allowed to occur unchecked for year after year after year on this government’s watch," Mr Albanese said.
"What’s the government’s plan to ensure workers should be compensated?"
Wesfarmers follows jewellery chain Michael Hill, apparel retailer Sunglass Hut, automotive and sports retailer Super Retail Group and celebrity chef George Calombaris in the ranks of companies that have underpaid workers millions in recent months.