Australia

Supermarket giant Woolworths underpaid workers by up to $300 million

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Supermarket giant Woolworths says it underpaid 5,700 staff by as much as $300 million over nine years.

Supermarket giant Woolworths owes 5,700 staff as much as $300 million in underpaid wages dating back over nine years.

The underpayment of salaried staff was uncovered by Woolies in a review triggered this year by the implementation of a new enterprise agreement covering its supermarkets and Metro stores.

Woolies said on Wednesday it has only analysed two years of data but that the issue could date back to 2010.

It expects returning the cash plus interest to staff will result in a one-off remediation charge of between $200 million and $300 million in February's first-half results.

The company said a review would now be extended to all its Australian businesses, which include Big W department stores and Dan Murphys liquor.

Woolworths CEO Brad Banducci.
Woolworths CEO Brad Banducci.
AAP

"As a business we pride ourselves on putting our team first, and in this case we have let them down," group chief executive Brad Banducci said in a statement.

"We unreservedly apologise."

The company said interim back payments covering the data analysed so far will be made before Christmas.

It said the majority of the staff affected are current and former salaried department managers at store level, with none of the 145,000 people covered by an enterprise agreement affected.

The announcement overshadowed the release of Woolies' first-quarter sales growth that, driven by the success of its Lion King Ooshies and Discovery Garden checkout giveaways, comfortably beat that announced on Tuesday by fierce rival Coles.

Comparable sales at Woolworths' supermarkets rose 6.6 per cent on the same period a year ago, easily trumping the 0.1 per cent from Coles.

Shares in Woolies were worth $37.73 before Wednesday's open, up 28.25 per cent this calendar year.

The company said retrieving and reviewing rostering, time and attendance, and payroll data across all businesses is expected to take at least until September 30 to complete.

Woolworths says it underpaid 5,700 staff by as much as $300 million over nine years.
Woolworths says it underpaid 5,700 staff by as much as $300 million over nine years.
Flickr/Matthew Paul Argall CC BY 2.0

Repayments will be made as soon as each respective year of the review is completed.

The company has reported the matter to the Fair Work Ombudsman.

Woolies entered into a new compliance partnership with Fair Work last year after it was discovered that three cleaning companies and a former sole trader were underpaying Korean cleaners at Woolworths' sites in Tasmania.

In 2014, Fair Work took legal action against two sub-contractors operating at several Coles sites for underpaying 10 trolley collectors over $200,000.

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