June 18, 2021
The Fair Work Ombudsman has launched legal action in the Federal Court against Woolworths in relation to alleged major underpayments of managers across Australia.
Australia’s largest supermarket operator disclosed to the Fair Work Ombudsman and the Australian Securities Exchange in 2019 that it had underpaid thousands of salaried employees in its supermarkets and Metro stores.
The regulator then investigated the underpayments of the managers and assessed the records of a sample of 70 in-store salaried managers for their work between March 2018 and March 2019.
The FWO alleges that Woolworths underpaid those 70 employees a total of $1,172,282 during this period. Despite backpayments, the FWO alleges that a total of $713,395 of underpayments remain outstanding to these employees.
The FWO is seeking court orders for Woolworths to rectify the total outstanding underpayments in relation to the 70 managers whose records were assessed – and for both companies to then apply those calculation methods to rectify any underpayments owed to all other affected salaried managers, plus interest and superannuation.
Fair Work Ombudsman Sandra Parker said addressing allegations of non-compliance in the corporate sector and ensuring remediation programs were being undertaken correctly was a priority.
“We allege that Woolworths failed to ensure that annual salaries were sufficient when compared to the actual hours worked, leaving their salaried managers significantly underpaid.”
The most significant underpayments related to Woolworths’ alleged failure to pay correct overtime entitlements.
The FWO alleges the underpayments ranged from $289 to $85,905 during one year. They were all full-time employees based primarily in Sydney, Melbourne or Brisbane.
In total, there were about 19,000 salaried managers employed by the two Woolworths companies between June 2015 and September 2019, which included full-time and part-time employees from every State and Territory.
The FWO also alleges that Woolworths failed to keep records which specified the number of overtime hours worked by the salaried managers or that detailed loadings, penalty rates or allowances.