Woolworths Australia has admitted in court that it underpaid over 1,200 employees in Victoria.
However, their lawyer called the supermarket giant an “exemplary employer.”
The company conceded in a Melbourne court on April 18 that they had failed to properly 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), ranging from a few hundred dollars to a maximum of $12,000 in one instance.
Woolworths’ primary business is its supermarket chain, one of Australia’s largest. The company operates over 1,000 supermarkets under the Woolworths brand and posted a $1.7 billion profit in the last financial year.
Woolworths self-initiated an investigation following discrepancies found during an internal audit of the IT system. The matter was swiftly reported to the Wage Inspectorate who pressed charges.
Despite the admitted breaches, Woolworths’ barrister Saul Holt KC emphasised the company’s status as an “exemplary employer” that gave jobs to many people in the community. Mr. Holt also outlined Woolworths’ attempts to rectify the situation, such as apologising to staff and tracking down former employees for restitution, including additional superannuation.
Whilst fines in Magistrates courts are usually capped at $480,000, Woolworths faces a theoretical penalty of more than $10 billion, though such a sum is unlikely to be awarded.
Representing the Wage Inspectorate, Victoria barrister Kathleen Crennan, was scathing of Woolworths’ actions saying, “There’s really no excuse for this to have happened in the first place.”
The Magistrate reserved her decision until April 24.
In 2019, after an internal audit, Woolworths admitted 5,700 staff had been underpaid by as much as $300 million as set out in the General Retail Industry Award (GRIA).
At the time, Woolworths chief executive Brad Banducci said, “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.”
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.
Like major mining corporations, retailers contend that alternative metrics such as return on capital offer a more accurate gauge of business profitability.
During an intense hearing spearheaded by Green MP Nik McKim, who questioned why Mr. Banducci did not know his company’s return on equity, Mr. McKim reminded him of the 6-month jail term as a penalty 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.”
