Coles supermarket fined for failing to pay Victorian staff long service leave
A supermarket giant has been publicly humiliated for underpaying its workers – but escaped with a fine because the magistrate did not have the power to really make it pay.
Melbourne City
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A Melbourne magistrate said he was handcuffed by legal limitations from giving Coles the sentence he felt it deserved for underpaying staff.
Coles Australia has been fined $50,000 for underpaying long service leave to more than 4000 Victorian employees in a landmark case.
The supermarket giant, who pleaded guilty to seven charges on March 30, was sentenced in Melbourne Magistrate’s Court on Wednesday.
The court heard an audit revealed Coles failed to correctly pay 4096 Victorian employees their long service leave, totalling $697,016.
On Wednesday magistrate Justin Foster slammed new long service leave legislation that prevented him from slapping the company with a bigger fine.
He said the $50,000 did not reflect how serious the offending was and set a dangerous precedent for future cases.
“It is hard to imagine that any financial penalty of such a poultry nature can achieve those sentencing objectives ... perhaps the public humiliation in these proceedings achieves those sentencing objectives,” he said.
“However, the fine given today is determined with those affirmation limitations present, and does not to my mind properly reflect the seriousness of the matters set out in the agreed statement of facts.
“I do have genuine concerns with the court presiding over this penalty, however I am bound to sentence according to the law.”
In an earlier court hearing, Mr Foster had warned the landmark case would set the precedent when prosecuting future “corporate cowboys”.
“To think that a corporate cowboy could be liable to a $10,000 penalty, it would encourage them … if this is the first offence of this nature, we want to get it right on the first,” he said.
The court heard Coles could have faced a maximum penalty of $237,676 if the 24 individual charges had not been reduced to seven charges.
The charges relate to a sample group of 24 former employees who between October 2019 and April 2020 were missing long service leave payouts after they left the company.
The investigation started after a former employee contacted the Wage Inspectorate Victoria.
Following the sentencing, Wage Inspectorate Victoria Commissioner Robert Hortle said there was “no excuse” for the retailer to rob its staff of long service leave.
“Underpayments like this are no way for any company, let alone one of Australia’s largest
employers, to treat its most loyal workers,” he said.
“There’s just no excuse for noncompliance with the law.
“Long service leave is a hard-earned, longstanding workplace entitlement and employees shouldn’t be put in a position where they have to complain to be paid properly.”
The court heard Coles Australia had paid the long service leave to those it had owed.
It will have three months to pay the $50,000 fine.
In a statement Coles apologised.
“We apologise to any of our Victorian team members whose long service leave entitlements were affected by this error and we have amended our payroll systems to address the issue,” a spokesperson said.
The case is the first of its kind to be prosecuted.
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