How Fair Work will respond to Woolworths’ $300m underpayment

Fair Work Ombudsman will take the ‘concerning’ issue of worker underpayments to the boardrooms of big business.

Fair Work Ombudsman Sandra Parker has vowed to hold Woolworths accountable for up to $300 million in employee underpayments, expressing shock yet another big publicly listed company has admitted breaching “workplace laws on a massive scale”.

The supermarket giant has apologised after a review following a new enterprise agreement found it had underpaid 5700 staff up to $300m over nine years.

READ MORE: Woolworths apologises for underpaying 5700 staff

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Ms Parker said Woolworths joined Wesfarmers, Qantas, Commonwealth Bank, Super Retail Group, Michael Hill Jewellers and many others in failing to ensure that staff are receiving their lawful entitlements.

“The Fair Work Ombudsman will conduct an investigation in relation to Woolworths’ self-disclosure and hold them to account for breaching workplace laws,” she said.

Ms Parker expressed frustration at the upsurge in large-scale businesses admitting that they did not classify staff correctly, pay overtime or penalty rates, or complete annual pay reconciliations where they are required.

“Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff. Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” Ms Parker said.

“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.

“These sorts of careless missteps by business can be costly, often running up into the millions of dollars across an entire workforce.”

Fair Work Ombudsman Sandra Parker. Picture: Aaron Francis

Ms Parker said the noncompliance identified within many of these companies was caused by ineffective governance, combined with complacency and carelessness toward employee entitlements.

“If companies do not prioritise workplace compliance from the outset, it can take significant resources and time to fix, particularly where companies do not have accurate records of times worked and wages paid. It is not surprising that workers lose trust in their company when this happens.”

Ms Parker said the broader reputational risk of breaching workplace laws can have a lasting impact on the bottom line of businesses.

“We encourage corporates to co-operate with us to rectify breaches, but they must understand that admission is not absolution. Companies should expect that breaking workplace laws will end in a public court enforcement outcome,” Ms Parker said.

“I intend to take this issue up with boards around the country, because frankly that is the level within organisations that should be taking an active leadership role on this issue, and seeking assurance about compliance from executive managers.

“Companies and their boards are on notice that we will consider the full range of enforcement options available under the Fair Work Act, including court enforceable undertakings and litigation where appropriate,” Ms Parker said.