The Woolies underpayment scandal has led other big retailers to double check their own books

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Australian retailers have been spooked into action following Woolworths’ admission that it underpaid its staff by up to $300 million, with multiple companies initiating fresh payroll audits.

Supermarket giant Woolworths revealed last week it had underpaid nearly 6000 salaried staff for the last 10 years due to non-compliance issues with the general retail award.

Its issues were uncovered following an alert from a store manager in February this year who worked out he was being underpaid around $8,000 per year due to Woolworths failing to pay him various loadings, allowances and overtime rates as specified by the award.

The manager was back paid following months of pushback and legal threats from the retailer, but by that time the company had realised the issue stretched much further than just one employee, and began a company-wide audit through PwC to identify the scope of the problem.

Other retailers, shocked by the magnitude of Woolworths’ stuff-up, have begun to follow suit.

A spokesperson for Metcash, which supplies independent supermarket chain IGA and hardware chain Mitre 10, said while the company conducted regular internal and external audits of its payroll, it would be double-checking its systems.

“Our processes also include having robust checks in place to avoid the specific issues of underpayment raised in the media this week,” the spokesperson said.

“Despite this, we feel it is appropriate as a responsible employer to again review our processes to ensure we are doing everything possible to make sure our employees are paid correctly.”

Upmarket department store David Jones and clothing chain Country Road are also planning a review, with a spokesperson saying the companies would conduct a fresh audit in light of Woolworths’ transgression.

“In response to the numerous instances of underpayment recently disclosed by several leading Australian businesses, David Jones and Country Road Group have commenced an audit of all payment data and processes across our businesses in addition to our standard auditing processes,” the spokesperson said.

Retail conglomerate Wesfarmers recently identified underpayment issues across both its Bunnings hardware chain and its industrials division. The company operates separate payroll systems across its divisions, however, a spokesperson said it will be undertaking “additional checks”.

“Should any issues or anomalies be identified during this process, our businesses will let their team members know and address the issue as quickly as possible,” they said.

The audits follow calls from former Fair Work Ombudsman Natalie James for companies to review pay arrangements for salaried workers to ensure their pay is aligned with provisions set by industry awards.

Following the announcement of underpayment, Woolworths chief executive Brad Banducci said the company intends to engage in an “industry-level dialogue” regarding the complexity of modern awards.

“At the right time, we’d like to come back and talk about the lack of flexibility in [awards] when interpreted literally,” he said.

Business Council of Australia chief executive Jennifer Westacott agreed, saying the current industrial relations system meant companies were “vulnerable to inadvertent payroll mistakes”.

This story originally appeared in the Sydney Morning Herald. Read the original here.

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