Woolworths and Coles are collectively setting aside a further $780 million to pay staff back for historical underpayments in what has already become the biggest wages scandal in history.
On Friday, the Federal Court determined that Australia’s two largest supermarket companies failed to keep accurate records of staff rosters, overtime and other entitlements for workers who were paid a salary for years stretching back more than a decade.
Woolworths is setting asideCredit: Jessica Hromas
Woolworths, which has already paid back over $486 million to staff, will set aside a further half a billion dollars: $180-330 million in remediation (post-tax), and a further $140-200 million post-tax for interest, superannuation and payroll tax.
“This decision will require significant and widespread changes to accepted retail practice for Woolworths Group and Australian businesses, large and small,” Woolworths said in a statement.
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Meanwhile, the gulf is widening between what Woolworths has set aside and what its smaller rival, Coles, is provisioning for. To date, Coles has repaid $31 million with a further $50 million to be paid, but in an update today, it estimated it would have to back-pay an additional $250 million.
“Coles’ preliminary estimate is that further remediation of between $150 million and $250 million may be required to reflect the findings of the court, including interest and on-costs,” the supermarket stated.
The estimate doesn’t include penalties or class action costs. The supermarket also hinted that it may exercise its right to appeal.
“Coles cautions the market from relying on speculative estimates which may not have adequate regard to the application of the decision to Coles’ specific circumstances.”
