Woolworths admits it underpaid staff by up to $280m

SYDNEY • Australian retail giant Woolworths yesterday admitted underpaying workers up to A$300 million (S$280 million), the latest in a string of big businesses that have failed to properly pay staff.

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

Woolworths - one of the country's largest grocery chains - estimated that 5,700 staff had been underpaid between A$200 million and A$300 million dating back to 2010.

"We unreservedly apologise," chief executive Brad Banducci said. "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 1 per cent in afternoon trade.

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

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

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."

The government last month announced it was preparing to introduce criminal penalties for employers who deliberately underpay staff. Industrial Relations Minister Christian Porter suggested those found guilty could face up to 10 years' imprisonment under the proposed laws.

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

Wage scandals have also hit the hospitality industry in recent months, with several celebrity chefs admitting they have 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 A$30,000 per year for overtime work.

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 A$8 million.

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.

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.


A version of this article appeared in the print edition of The Straits Times on October 31, 2019, with the headline 'Woolworths admits it underpaid staff by up to $280m'. Print Edition | Subscribe