Woolworths (ASX:WOW) settles class action on underpayments

Company News

by Lauren Evans

Woolworths (ASX:WOW) has settled the class action proceedings made against them in 2019, regarding payment shortfalls to its salaried team members.

On the basis that the proceedings are stopped, the supermarket giant has paid $370 million in remediation, to general retail industry award (GRIA) covered members in its supermarkets, Metro, BIG W, Dan Murphy’s and BWS businesses from September 2013 to September 2019.

The news comes after a Canberra law firm intended to file employee class action proceedings against Woolworths in the Federal Court of Australia in 2019. Responding to the payment shortfall complaint, Woolworths made a commitment to rectify payment shortfalls, including interest and superannuation contributions, while self-reporting the matter to the Fair work Ombudsman.

Woolworths announced this morning another step to its remediation program, with an ex-gratia payment of $2,500 plus superannuation to be paid before Christmas, to around 20,000 current and former GRIA covered salaried members. The total payment is expected to be around $50 million, and covers the period beyond the legal limitation period (January 2010 to September 2013).

Woolworths reviewed its records between 2010 and 2013 and believe they took the adequate steps to comply with the GRIA at the time. Despite the reasurance, they did not have records of the rosters, and in the absence of those records, it was not possible to determine whether there were payment shortfalls. 

“Since we discovered this issue in 2019, we’ve made it our priority to do the right thing for our team members. We’ve worked through hundreds of millions of records as quickly as we can to ensure former and current team members have been paid what they were entitled to, plus interest and superannuation, “ said Woolworths CEO, Brad Banducci. 

“We said at the outset that we would extend our review beyond our legal obligations and look back to 2010. With detailed analysis challenging in the earlier years, we felt an equal and broad-based payment to all potentially impacted team members was a fair and equitable way to approach remediation for this period.”

Shares in Woolworths (ASX:WOW) are trading 0.5 per cent higher at $39.88.

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