The scale of wage theft at Woolworths Group has blown out yet again, with the retailer on Wednesday revealing $70 million in additional staff underpayments, this time within its logistics business Primary Connect.
Woolworths, which has already revealed more than $600 million in underpayments over recent years, said it uncovered its latest wage theft after finishing a broad payroll review of the entire company in late 2022.
“Analysis of payroll compliance … has resulted in a further pre-tax charge of $70 million, principally related to Primary Connect, which had not previously been reviewed,” Woolworths said on Wednesday.
Corporate filings on Wednesday suggest total worker underpayments uncovered at Woolworths Group since 2019 are now worth more than $750 million – with about $276 million still yet to be repaid to its staff.
The latest revelations are bad timing for the retailer, which is preparing a Fair Work Ombudsman prosecution at the Federal Court during June.
In a statement a FWO spokesperson said Woolworths flagged “further potential non-compliance” with them before their result on Wednesday.
“The Fair Work Ombudsman’s investigation into Woolworths Group Limited is continuing,” the spokesperson said.
“With our investigation ongoing it is not appropriate to comment further at this time.”
The disclosure of new underpayments came as Woolworths posted a bumper $907 million half-year net profit, up 14 per cent on the prior year.
Sales rose 4 per cent to $33 billion while supermarket inflation came in at 7.7 per cent for the December quarter, up from 7.3 per cent quarterly.
Woolworths also declared an increased dividend of 46 cents per share.
|
Supermarkets reveal grocery price spike
10 News First – Disclaimer |
|
Woolworths still owes ‘estimated’ $276 million
Woolworths Group boss Brad Banducci was not asked about the new underpayments in a Wednesday briefing, although he did refer to “the same kind of challenges … addressed across the rest of our group”.
Previously, Woolworths has revealed hundreds of millions worth of staff underpayments due to improper payment of entitlements with full and part time workers often being incorrectly paid after they had taken leave.
Details buried in the company’s half-year financial statements reveal that the new wage theft was “predominately” due to failures to comply with enterprise agreements for hourly paid staff between the 2017 and 2023 “financial reporting periods”.
The failings are just the latest blowout in Woolworths’ wage theft scandal, which began in 2019 when the company revealed about 5700 staff were underpaid between $200 million and $300 million.
Since then the total value of underpayments has ballooned several times. It is now estimated at more than $750 million.
Woolworths said on Wednesday that it repaid $85 million to staff in the six months to December 31. There is at least $276 million worth of underpaid wages and entitlements the company must still remediate.
It said this figure is a “best estimate” of outstanding repayments but was “subject to verification, finalisation of payments … and the conclusion of the group’s engagement with the relevant regulators”.
About $70 million is still due to hourly paid workers, while $206 million is owed to salaried workers. Woolworths says it had paid $477 million in underpaid wages and entitlements to workers to date.
The latest disclosures come as Woolworths prepares to defend two prosecutions over its wage theft scandals in court, one brought by the Fair Work Ombudsman and another class action from Adero Law Firm.
Both cases had a court date for June 2023, Woolworths said.
The FWO alleges that Woolworths failed to cover worker entitlements for overtime rates, weekend and public holiday penalty rates, meal allowances and annual leave loading under the retail industry award.
It said in 2021 that the “most significant” alleged underpayments related to Woolworths’ failure to pay correct overtime to its salaried managers.
The FWO has been contacted about the latest underpayments disclosed by Woolworths on Wednesday.
