Woolworths underpays staff $300 million
The supermarket giant says it is “deeply sorry” after it announced it had underpaid 5700 staff hundreds of millions of dollars for nearly a decade.
Retail
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Woolworths has underpaid nearly 6000 employees over the past nine years with repayments expecting to cost up to $300 million.
The supermarket giant said this morning the major irregularity was uncovered during a review triggered this year by the implementation of a new enterprise agreement with employees at all supermarkets and the smaller Metro stores.
The underpayment affects “salaried team members”, not checkout and supermarket floor staff.
Woolies said it had only analysed two years of data but admitted the underpayment could date back as far as 2010. At least 5700 staff could be repaid between $200 million and $300 million in total.
It said a review would now be extended to all its other businesses in its Australian network, including Big W department stores and the liquor division featuring Dan Murphy’s and BWS.
The company released a statement this morning saying it was “deeply sorry”.
“As a business, we pride ourselves on putting our team first, and in this case we have let them down,” group chief executive Brad Banducci said in a statement.
“We unreservedly apologise. The highest priority for Woolworths Group right now is to address this issue, and to ensure that it doesn’t happen again.”
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Mr Banducci told reporters this morning the company only became aware of the massive issue during the creation for a new enterprise agreement (EA) for its wage team members.
The salaried staff members noticed that because of the new EA, some of the staff who worked under them were being paid more than them.
“That made us alert that there could be, inadvertently, an issue here,” the chief executive said.
“We then convened a team to look at that issue and look at it holistically across all of the salaried team members who worked in Woolworths supermarkets.
“We had to extract all the files for the last two years and it has taken us a long time to analyse this.”
With the help of consulting firm PwC, Woolworths investigated the irregularities of salaried store members compared to team members paid under the new agreement.
It said the majority of the staff affected are current and former salaried department managers at store level, with none of the 145,000 people covered by an enterprise agreement affected. Those wages that have been identified as being underpaid in the two years between September 2017 to August 2019 will be paid back before Christmas, Woolworths has promised.
But the company said retrieving and reviewing rostering, time and attendance, and payroll data across all businesses is expected to take at least until September 30 to complete.
Repayments will be made as soon as each respective year of the review is completed.
The scandal comes after a number of recent high-profile retail networks and hospitality businesses failing to meet industry standards.
These include Neil Perry’s Rockpool Dining Group, which owes staff at least $10 million, and fellow celebrity chef George Calombaris, who repaid workers $7.8 million, with the Fair Work Ombudsman expressing frustration at adding another major company to the list.
“(We are) shocked that yet another large, publicly listed company has today admitted to breaching Australia’s workplace lawson a massive scale,” the ombudsman Sandra Parker said in a release.
“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.”
Woolworths has self-reported the matter to the Fair Work Ombudsman.
The major payments breach should be a wake up call for the industry, the Shop, Distributive and Allied Employees Association (SDA) said.
“The SDA has been concerned about salary settings for salaried staff in the retail industry for some time,” the union’s spokesperson said this morning.
“While Woolworths has committed to rectifying these salary staff underpayments back to 2010, the SDA now calls on all retailers to audit their payroll settings especially for salary staff.”
The announcement of underpayments for nearly half of the supermarket’s 11,000 employees is a painful blow which overshadows a massive first-quarter sales growth jump, comfortably beating fierce rivals Coles.
Woolworths’ performance was driven by the success of its Lion King Ooshies and Discovery Garden checkout giveaways, with sales at supermarkets surging 6.6 per cent on the same period a year ago, easily trumping the 0.1 per cent from Coles.
The company entered into a new compliance partnership with Fair Work last year after it was discovered that three cleaning companies and a former sole trader were underpaying Korean cleaners at Woolworths’ sites in Tasmania.
In 2014, Fair Work took legal action against two subcontractors operating at several Coles sites for underpaying 10 trolley collectors over $200,000.
Woolworths said it has communicated with staff members about the issue and has created a dedicated website for former employees who are unaware if they have been underpaid.
That website is team.woolworths.com.au.
It said an internal website has been set up for current staff members who have queries.
—additional reporting from AAP’s Alex Druce
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Originally published as Woolworths underpays staff $300 million