Woolworths Acknowledges Underpayment of 1,200 Employees
Woolworths Australia has confessed in court to underpaying over 1,200 employees in Victoria.
Despite this, their legal representative described the supermarket giant as an “exemplary employer.”
In a Melbourne court on April 18, the company acknowledged failing to appropriately compensate 1,235 former employees for their long service leave entitlements between November 2018 and January 2023. The total owed amounted to $1.24 million (US$793,687), varying from a few hundred dollars to a maximum of $12,000 in one instance.
Woolworths’ main business is its supermarket chain, one of the largest in Australia, operating over 1,000 supermarkets under the Woolworths brand and reporting a $1.7 billion profit in the previous financial year.
Following an internal audit of the IT system that revealed discrepancies, Woolworths initiated an investigation. The matter was promptly reported to the Wage Inspectorate, leading to charges being pressed.
Despite the admitted breaches, Woolworths’ barrister Saul Holt KC highlighted the company’s efforts to rectify the situation, including apologizing to staff and locating former employees for restitution, such as additional superannuation.
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While Magistrates courts typically limit fines to $480,000, Woolworths could face a potential penalty of up to $10.65 billion, though such an amount is unlikely to be imposed.
Representing the Wage Inspectorate, Victoria barrister Kathleen Crennan condemned Woolworths’ actions, stating, “There’s really no excuse for this to have occurred in the first place.”
The Magistrate will announce her decision on April 24.
In 2019, following an internal audit, Woolworths acknowledged underpaying 5,700 staff by as much as $300 million in accordance with the General Retail Industry Award (GRIA).
At that time, Woolworths CEO Brad Banducci expressed remorse, saying, “We unreservedly apologize.”
“The top priority for Woolworths Group right now is to address this issue and ensure it does not recur.”
Second Major Blow For Woolworths
The latest admission marks another blow for Woolworths, following Mr. Banducci’s recent confrontation in a senate hearing over alleged supermarket price gouging.
He was threatened with jail for contempt of court after he refused to answer a question about profit metrics.
Mr. Banducci declined to confirm if Woolworths’ return on equity was 26 percent, saying it was not the best metric to measure supermarket profitability.
Similar to major mining corporations, retailers argue that alternative metrics like return on capital provide a more accurate assessment of business profitability.
During a heated hearing led by Green MP Nik McKim, who questioned why Mr. Banducci was unaware of his company’s return on equity, Mr. McKim reminded him of the 6-month jail term for contempt.
“I think your evidence to the committee is that you don’t know what the return on equity is for the last financial year and you’d like to take the question on notice?” Senator McKim asked.
“Senator, yes I will take it on notice,” Mr. Banducci said, adding he had not seen the document.
“I don’t focus on it. It’ll probably be in a document somewhere but it’s not something I focus on.”
