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In a statement released today, Woolworths has announced they underpaid approximately 5,700 of its employees as much as $300 million dollars due to non-compliance with the industry award.

Woolworths Group unreservedly apologised after a review found those salaried store workers working in Woolworths Supermarkets and Metro stores have not been paid in full compliance with Woolworths Group’s obligations under the General Retail Industry Award 2010.

Woolworths Group began the review earlier this year after the implementation of a new Enterprise Agreement (EA) in Woolworths Supermarkets and Metro stores. The review highlighted an inconsistency in pay for a number of salaried store team members compared to workers paid under their new EA.

Annual salaries for workers were set to cover ordinary working hours and reasonable overtime. However, workers were also entitled to be paid the higher of their contractual salary entitlements, or what they otherwise would have earned for actual hours worked under the relevant Award. The review found the number of hours worked, and when they were worked, were not adequately factored into the individual salary settings for some salaried store workers.

The review is being extended to all Woolworths Group businesses in Australia to ensure that all relevant award requirements have been met for salaried workers. Taking the existing two years of data and using initial modelling across the Group, the estimated one-off impact for remediation, assuming the issue could go as far back as the implementation of the modern award in 2010, is expected to be in the range of $200-300 million (before tax). An update on this issue will be provided at the Group’s Half Year 2020 results in February. There is absolutely no hint that this underpayment was deliberate.

Thought points

  • If a significant oversight can occur in large enterprises such as Woolies, and Bunnings last month, which have significant systems and processes in place why could it not happen to your business?
  • If implementing annualised salaries for Award covered workers, periodically ensure you are paying your workers appropriately compared to a relevant Award.

Need help?

Should you have any concern over possible underpayments Better HR would be happy to discuss your issues and appropriate next steps.

Call Better HR on 1300 659 563 or visit our website.