Woolworths faces class action over unpaid wages

Woolworths could be hit with a class action over revelations it underpaid thousands of its employees up to $300m.

A Canberra law firm is bringing a class action against Woolworths over unpaid wages. Picture: AAP

Woolworths could be hit with a class-action lawsuit over revelations it underpaid thousands of its employees up to $300 million.

In a statement to the ASX, Woolworths said it had been notified that Canberra law firm Adero Law had announced its intention to file employee class action proceedings against the company in the Federal Court of Australia, in relation to payment shortfalls to Woolworths salaried store team members covered by the General Retail Industry Award.

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In October Woolworths revealed as many as 5700 of its staff had been underpaid and that it would now payback the underpaid wages that amounted to as much as $300 million.

Last week, as part of that process, Woolworths chief executive Brad Banducci gave up his short term bonus, worth as much as $2.6 million, and chairman Gordon Cairns took a 20 per cent cut to his board fees for 2020.

Woolworths has committed to fully rectify all payment shortfalls to current and former salaried team members across the group, including interest and superannuation contributions, as soon as possible.

“In keeping with that commitment, Woolworths Group continues to work towards making interim payments (including superannuation contributions and interest) before Christmas, to affected current and former salaried Supermarkets and Metro store team members for the two years reviewed to date (September 2017 to August 2019),” the company said on Monday.

“In the context of its commitment to fully remediate all affected salaried team members, Woolworths Group believes the class action proceedings are without merit. Woolworths Group will fully defend the proceedings.”

As stated in its October announcement, Woolworths estimates that the one-off impact for remediation was expected to be in the range of $200-300 million (before tax). An update will be provided at the company’s half-year 2020 results in February.