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Australia's Woolworths Admits Underpaying Staff Up to Aus $300 Million

The payment shortfall by one of the country's largest grocery chains is the largest in Australian history and follows a series of wage scandals that have affected some of the country's biggest names.


Updated:October 30, 2019, 1:57 PM IST
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Australia's Woolworths Admits Underpaying Staff Up to Aus $300 Million
Workers can be seen on a building site behind a Woolworths Ltd supermarket, Australia's biggest grocery chain by sales, located in Sydney, Australia. (Image: Reuters)

Sydney: Australian retail giant Woolworths on Wednesday admitted underpaying workers up to 300 million Australian dollars (USD 206 million), the latest in a string of big businesses that have failed to properly pay staff.

The payment shortfall by one of the country's largest grocery chains is the largest in Australian history and follows a series of wage scandals that have affected some of the country's biggest names.

Woolworths estimated that about 5,700 staff had been underpaid between Aus$200 million and Aus$300 million dating back to 2010.

"We unreservedly apologise," CEO Brad Banducci said in a statement.

"The highest priority for Woolworths Group right now is to address this issue, and to ensure that it doesn't happen again."

The retailer said it would begin making back payments, including interest and retirement contributions, before Christmas.

Sydney-listed shares in Woolworths fell more than one percent in afternoon trade.

Fair Work Ombudsman Sandra Parker described the underpayment as a breach of Australia's workplace laws on a "massive scale".

She added: "Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff."

"Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough."

The government last month announced it was preparing to introduce criminal penalties for employers who deliberately underpay staff.

Industrial Relations Minister Christian Porter, who is also the Attorney-General, suggested those found guilty could face up to 10 years imprisonment under the proposed laws.

Big Australian brands such as the Commonwealth Bank, public broadcaster ABC, and retail conglomerate Wesfarmers have all owned up this year to underpaying staff millions of dollars.

National airline Qantas also said it had over- and under-paid thousands of dollars to more than 200 workers after employing them on the wrong contracts.

Wage scandals have also swept through the hospitality industry in recent months, with several celebrity chefs admitting they had failed to adequately compensate staff.

Global star Heston Blumenthal's Dinner outlet in Melbourne was accused in a 2018 probe by the Sydney Morning Herald and the Age of underpaying staff by up to 30,000 Australian dollars per year by not stumping up for overtime work. The case is being looked into by the Fair Work Ombudsman.

Neil Perry's famed Rockpool Dining Group has been accused of destroying and doctoring timesheets to cover up underpayments, while former MasterChef Australia judge George Calombaris was fined after admitting his restaurants had underpaid staff 8 million Australian dollars.

The revelations mean thousands of workers have missed out on salaries and entitlements across a range of industries, with firms now scrambling to repay current and former employees.

Convenience store chain 7-Eleven has returned more than 160 million Australian dollars to staff and paid fines upwards of 1.8 million Australian dollars after its franchises were found to have systematically underpaid workers.

Unions have warned that so-called "wage theft" is becoming an entrenched business practice in Australia, and are calling for harsher penalties for companies that flout workplace laws.

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