Woolworths admits it has been underpaying almost 6,000 staff by as much as $300 million

It’s all a blur at Woolies. (Photo by Quinn Rooney, Getty Images)
  • Staff at Woolworths may be owed as much as $300 million after the company admitted it may have been underpaying them for almost a decade.
  • In total, 5,700 employees are thought to have been affected, with the error potentially arising in 2010. Woolworths promises to backpay with interest, making two-years worth of payments before Christmas.
  • It comes as Australian unions push for 5-year jail terms and multimillion fines for the most egregious cases of wage theft.

At this stage, it might be easier and quicker to write a list of companies who haven’t underpaid staff.

This year Sunglass Hut, the Commonwealth Bank and a string of celebrity chefs have all been embroiled in underpayment claims – to name but a few. Woolworths joined the unenviable field on Wednesday after it revealed it had discovered it was paying 5,700 of employees under the award.

“As a business, we pride ourselves on putting our team first, and in this case, we have let them down. We unreservedly apologise. The highest priority for Woolworths Group right now is to address this issue and to ensure that it doesn’t happen again,” CEO Brad Banducci said in a statement to the ASX.

The underpayment could go all the way back to 2010, when the current award was implemented, the company acknowledges. If so, Woolworths estimates that collectively it might owe workers as much as $300 million.

The error appears to have affected salaried workers, with some paid too little given “the number of hours worked, and when they were worked” were not factored into their pay.

“Woolworths Group is fully committed to fully rectifying these payment shortfalls and an extensive plan is in place to ensure salaried team members’ pay is correct and compliant moving forward,” the company said in the same statement.

Woolworths now promises to pay back all that staff are entitled to, including interest and super contributions. The company claims it will make interim back payments before Christmas to cover the two-period year leading up to August 2019. After that, it will look to conduct a review to cover what could be nine years of non-compliance.

It comes as Australian unions are pushing to criminalise wage theft, urging the attorney-general’s department to implement 5 year jail sentences for individuals and $10 million fines for companies in the most egregious cases, after a spate of wage theft incidents were unearthed this year.

It seems like Woolworths is looking to resolve underpayment issues before any such penalties gain traction.

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