Supermarket giant and one of Australia's largest employers Woolworths has been accused of "a form of wage theft" after it revealed it underpaid nearly 6000 of its employees as much as $300 million.
In a statement released this morning, the retailer revealed it had failed to pay approximately 5700 of its salaried workers across its supermarkets and Metro stores in compliance with the General Retail Industry Award.
The underpayment was identified after the company reviewed its workers' salaries prior to implementing the company's newest enterprise bargaining agreement, identifying inconsistencies with workers' overtime levels under the award.
"The review has found the number of hours worked, and when they were worked, were not adequately factored into the individual salary settings for some salaried store team members," the company said.
Underpayments could track back as far as 2010, and the company estimates the total cost of remediation to be between $200 million and $300 million.
Salaried workers at the company's other divisions, including Big W, Dan Murphy's and BWS, may also be affected. A total of 19,000 salaried workers are employed by Woolworths, and the company said former workers may also be eligible for underpayment.
Speaking to The Age and The Sydney Morning Herald, secretary of the Retail and Fast Food Workers Union (RAFFWU) Josh Cullinan lashed the retailer, branding the underpayments a "form of wage theft".
Mr Cullinan pointed to the recent underpayments by fellow retailer Wesfarmers, including at hardware chain Bunnings, as an indication issues were rife within the sector.
"Everywhere we touch there is substantial ongoing underpayments in some form or another. It's no surprise to us these sorts of issues are continuing and will continue in the foreseeable future," he said.
"These employers have been able to save huge sums of money [through underpayments]. Woolworths, had they been able to get away with this, would have saved hundreds of millions of dollars."
The $200 million to $300 million range includes full entitlements such as superannuation and interest, though the company is only half-way through its review, which is expected to take until the end of the financial year.
On a per-worker basis stretching back to 2010, and at the higher end of the underpayment range, each worker may have been underpaid as much as $5200 per year. Mr Cullinan said the scale of underpayment was unprecedented across publicly announced cases.
Fair Work Ombudsman Sandra Parker said the watchdog would conduct an investigation into Woolworths' underpayment and hold the company to account for breaching workplace laws.
"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," Ms Parker said.
Ms Parker said she intended to take the issue of wage compliance up with company boards around the country, saying corporate Australia was "on notice".
Woolworths will make the first backpayments to the affected workers before Christmas.
"As a business we pride ourselves on putting our team first, and in this case we have let them down. We unreservedly apologise," chief executive 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."
- SMH/The Age