Fair Work Ombudsman takes Woolworths to court over underpaid wages

The Fair Work Ombudsman alleges 70 employees were underpaid more than $1.17m over a year, with investigations continuing into thousands of others.

The Fair Work Ombudsman has begun legal action against Woolworths in the Federal Court, amid allegations the supermarket underpaid salaried managers more than $1.17m.

Woolworths Group Limited and Woolworths (South Australia) Pty Limited disclosed to the Ombudsman and the Australian Securities exchange in 2019 that it had underpaid thousands of salaried employees in its supermarkets and metro stores.

But, further investigations into the underpayments of managers has revealed an alleged 70 employees were underpaid a total of $1,172,282 between March 2018 and March 2019.

Woolworths is alleged over underpaying 70 managers more than $1m. Picture: NCA NewsWire / David Crosling

The FWO will further allege a total of $713,395 of underpayments remains outstanding to these employees after backpayments were made.

Up to 19,000 salaried managers employed by the two Woolworths companies between June 2015 and September 2019 could be further impacted by the investigations.

Of the 70 managers so far identified, the FWO alleges the full-time team members, employed as team support, team managers or duty managers based in Sydney, Melbourne and Brisbane were underpaid between $289 to $85,905 over the year.

The FWO is seeking Federal Court orders for the supermarket to rectify the total outstanding underpayments, and ensure all other managers are not impacted. Picture: AAP IMAGE / MONIQUE HARMER

The FWO is seeking court orders for the supermarket to “rectify the total outstanding underpayments” for the 70 managers, and for both companies to then apply those calculation methods to rectify any underpayments owed to all other affected salaried managers, plus interest and superannuation.

Fair Work Ombudsman Sandra Parker said the court action highlighted that large employers face “serious consequences” if they did not prioritise workplace law compliance.

“We allege that Woolworths failed to ensure that annual salaries were sufficient when compared to the actual hours worked, leaving their salaried managers significantly underpaid,” Ms Parker said.

“We also allege that significant underpayments have not been fully back-paid, and we will seek court orders for Woolworths to recalculate and rectify all underpayments for all affected employers.”

The FWO alleges the two companies’ annual salary arrangements did not cover employee entitlements for various overtime rates, weekend and public holiday rates, meal allowances, and annual leave lowing owed under the General Retail Industry Reward 2010, given the actual hours worked.

The FWO further alleges both companies failed to make or keep records which specified the number of overtime hours worked by the salaried managers or that detailed the loadings, penalty rates or monetary allowances applicable to the hours worked by the salaried managers.

A directions hearing in the Federal Court in Sydney is still to be scheduled.