Coles admits to another $25m in underpaid wages as lost wages bill blows out

Only a day after BHP revealed a $430m underpaid wages scandal, supermarket chain Coles has added another $25m to its lost wages bill after further paperwork investigations.

Coles has admitted to another $25m in underpaid wages, taking its lost wages bill to $50m. Picture: Shae Beplate.

Coles is the latest corporate to admit to discovering more underpaid wages to its staff, revealing on Friday that after further investigations into underpayment to salaried managers it would need to pay another $25m to these workers to take the total missing wages bill to $50m.

In 2021 Coles incurred $13m in remediation and took a provision of $12m against the mounting wages scandal.

The new lost wages adds to an already $25m in underpaid wages and costs the supermarket giant has confessed to, with salaried managers underpaid now almost $50m between 2014 and 2020, and the wages scandal now the subject of a case brought by the Fair Work Commission in the Federal Court that will begin next week.

Coles will be joined in the court case by rival Woolworths which has its own wages scandal. In late 2019 Woolworths had disclosed it had underpaid 5700 of its staff by as much as $300m – a record at the time - but that lost wages bill has since quickly raced to almost $600m as more underpayments were discovered the cost of repayments mounted.

Missing wages is becoming a regular confession for corporate Australia. This week mining giant BHP said it could be months before the company is able to identify the extent of its underpayments to separate groups of workers after the mining giant admitted it had underpaid about 28,500 Australian workers hundreds of millions of dollars since 2010.

BHP called in assurance firm Protiviti this week after telling the Fair Work Ombudsman on Wednesday it believed it owes separate sections of its workforce at least $US280m ($430m) in leave and entitlements due to a failure to interpret industrial agreements correctly.

Other companies in the last few years to admit to underpaid or lost wages to staff have included Bunnings, Michael Hill International, The Reject Shop and Super Retail Group, with the bills growing into the tens of millions and hundreds of millions of dollars as new discoveries of underpayments are made.

On Friday Coles said in a statement to the ASX that in February 2020 it announced it was conducting a review into the pay arrangements for all salaried team members covered by the General Retail Industry Award (GRIA) after identifying shortfalls in the remuneration of salaried managers in its retail businesses.

“Coles actively sought to address the issues based on available information and conducted a remediation exercise. Coles expressed its deep regret and apologised to affected team members,” it said in its ASX statement.

Subsequently, a class action and a separate proceeding by the Fair Work Ombudsman were commenced in the Federal Court in relation to the alleged underpayment of salaried managers in Coles’ supermarkets and the interpretation of the GRIA and the Fair Work Act. “Coles has continued to work diligently in relation to these issues.”

But the retailer had now discovered more wages that were likely underpaid.

“Coles advises that, following further consideration of the issues as they have evolved, it intends to conduct a further remediation relating to the reconciliation of available records of the days and hours of work of salaried supermarket managers.

“Coles apologises unreservedly to affected team members.”

This will see Coles will take an additional provision of $25m in relation to this matter. In relation to other matters, including the interpretation of the GRIA and Fair Work Act, Coles awaits the court’s decision on these complex issues, it said.