Coles, the latest company to acknowledge underpaying its employees, revealed on Friday that it had discovered further wage discrepancies for salaried managers. As a result, it would need to pay an additional $25 million to these workers, bringing the total amount owed to $50 million.
In 2021, Coles had already incurred $13 million in remedial payments and set aside $12 million in anticipation of the growing wages scandal.
The newly identified underpaid wages compound the existing issue, which Coles had previously admitted to, with salaried managers being underpaid nearly $50 million between 2014 and 2020. The Fair Work Commission has initiated legal proceedings in the Federal Court, scheduled to commence next week, to address this wages scandal.
Woolworths, a rival supermarket chain, will also be involved in the court case as it has faced its own wages scandal. In late 2019, Woolworths disclosed that it had underpaid approximately $300 million to 5,700 of its employees, but the total sum of lost wages has since skyrocketed to nearly $600 million due to the discovery of additional underpayments and the associated repayment costs.
The issue of missing wages is becoming a recurring problem for Australian corporations. Mining giant BHP recently admitted to underpaying approximately 28,500 workers in Australia, amounting to hundreds of millions of dollars since 2010. The company has enlisted the services of assurance firm Protiviti to help determine the full extent of the underpayments.
Over the past few years, several other companies, including Bunnings, Michael Hill International, The Reject Shop, and Super Retail Group, have also confessed to underpaying or losing wages to their employees. These instances have resulted in bills reaching tens of millions and even hundreds of millions of dollars as new cases of underpayment come to light.
Coles acknowledged that in February 2020, it initiated a review of pay arrangements for all salaried team members covered by the General Retail Industry Award (GRIA) after identifying deficiencies in the remuneration of salaried managers within its retail businesses. The company expressed regret and issued an apology to the affected employees while actively working to rectify the situation based on the available information.
As a result, a class action lawsuit and a separate proceeding by the Fair Work Ombudsman were filed in the Federal Court, focusing on the alleged underpayment of salaried managers in Coles’ supermarkets and the interpretation of the GRIA and Fair Work Act. Coles stated that it has been diligently addressing these issues.
However, the company recently discovered further instances of likely underpayment. Coles intends to conduct additional remedial actions to reconcile the available records of working days and hours for salaried supermarket managers. It sincerely apologized to the affected employees.
Consequently, Coles will allocate an additional provision of $25 million to address this matter. As for other matters, including the interpretation of the GRIA and Fair Work Act, Coles is awaiting the court’s decision on these intricate issues.
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