Woolworths hit with more than 1000 criminal charges over unpaid leave

The supermarket giant has been accused of failing to pay long service leave to more than 1235 former employees.

The Woolworths supermarket at 54 Manchester Rd, Carrara. Picture: Tertius Pickard

Woolworths is facing more than 1000 criminal charges in Victoria for allegedly failing to pay over $1 million in long service leave to 1235 former employees.

Under state wage theft laws, failure to pay long service leave is a criminal offence, carrying maximum penalties of more than $10 million.

The laws provide for the jailing of employers for deliberate wage theft but not for unpaid long service leave.

Wage Inspectorate Victoria alleges that between 2018 and 2021, Woolworths Group contravened the state’s Long Service Leave Act by failing to pay more than $960,000 in long service leave entitlements to 1199 former employees.

It alleges Woolworths subsidiary Woolstar failed to pay more than $45,000 in long service leave entitlements to 36 former employees.

The maximum penalty for each offence by a body corporate is 60 penalty units for each day during which the offences continue - $9671.40 from July 2018 to June 2019, $9913.20 from July 2019 to June 2021 and $10,904.40 from July 2021 to June 2022.

The matter is listed for mention in the Melbourne Magistrates’ Court on September 6.

Commissioner of Wage Inspectorate Victoria, Robert Hortle, said Victorians would be disappointed to see a household name facing underpayment allegations as they expected businesses with significant payroll resources to “get this stuff right”.

“Long service leave is a long standing, valued workplace entitlement in Victoria, and the Wage Inspectorate is here to ensure it is paid when it is owed,” he said.

“The amount of underpayment never tells the full story in long service leave matters. It‘s hard to put a value on the leave workers were initially denied. Time that could have been spent with family, travelling or just relaxing.”

A Woolworths spokesman said a payroll review had identified “discrete instances of potential non compliance” with the company’s long service leave legal obligations which were self-reported to Wage Inspectorate Victoria in February 2022.

“We have since made back payments or corrected leave balances to affected team members, including interest and superannuation,” he said.

“We have apologised to affected team members and strengthened our payroll systems to address the long service leave issues we identified.”

The Wage Inspectorate has court cases against Optus, CommSec and BankWest alleging breaches of Victoria’s long service leave laws.

In 2021, a Wage Inspectorate investigation found over 4,000 former Coles workers in Victoria were underpaid almost $700,000 in long service leave entitlements.

Victoria’s Long Service Leave Act provides long service leave for employees who have worked continuously with one employer for at least 7 years. It applies to work that is full time, part time, casual, seasonal and fixed term.

After at least 7 years’ continuous employment with one employer, an employee is entitled to take their long service leave and be paid any unused long service leave entitlement when their employment ends.

Most Victorian employees will be covered by and entitled to long service leave in accordance with the Act, unless they have a long service leave entitlement from another source, such as under other legislation, a registered agreement, award or another law.