Allegations of widespread employee underpayment at Australian supermarket giants Coles and Woolworths have yet to be fully resolved, two years after a protracted legal battle involving close to 30,000 employees. The Federal Court has recently issued a judgment regarding several cases brought against these companies, which were accused by the Fair Work Ombudsman of tacitly endorsing unlawful practices across various stores.
In terms of financial restitution, Woolworths has reimbursed approximately $330 million, while Coles has returned about $7 million to salaried managers who did not receive their rightful entitlements. Nevertheless, both the Fair Work Ombudsman and former employees involved in two class actions are advocating for additional payments, arguing that the companies violated the stipulations of a 38-hour work week by allowing staff to consistently work overtime.
The Ombudsman highlighted deficiencies in the management of informal rosters and record-keeping concerning overtime, penalties, and allowances. While Woolworths stated that certain employees were permitted to work up to 45 hours weekly without being obligated for further overtime, Coles contended that their managers had discretion over their working hours and suggested that the Fair Work Ombudsman had overestimated actual hours worked.
Justice Nye Perram determined that both retailers did not adhere to their obligations to maintain accurate employment records, noting particularly that Coles failed to implement a proper overtime system and that its attendance records were often unreliable. The judge pointed out that one litigant, responsible for managing customer service, likely worked additional days beyond those scheduled, rendering the provided roster sheets inaccurate. Additionally, the judge found that her salary deductions for Coles-branded clothing were improper, indicating her entitlement to a clothing and laundry allowance.
In his comprehensive ruling, Justice Perram expressed dissatisfaction with the complexity of the litigation involving the Fair Work Ombudsman, which obscured the core issues and saw each side presenting too many case studies. The legal actions covered Woolworths managers across locations in Sydney, Melbourne, and Brisbane from June 2015 to September 2019, while Coles’ case involved managers from 2017 to 2020.
Justice Perram has indicated that he intends to hold a case management hearing in October to strategise the follow-up actions and the compensation process for the 27,700 impacted employees. In response to the judgment, Coles expressed hope that the ruling would clarify industry awards and Fair Work regulations, and highlighted their new measures to prevent future occurrences. Woolworths confirmed their commitment to address underpayment matters and ensure that employee compensation is accurately managed moving forward.