Australia’s supermarket giant, Woolworths, is facing over 1000 criminal charges for allegedly failing to pay long service leave to its workers in Victoria. The charges were filed in the Melbourne Magistrates’ Court, claiming that Woolworths and its subsidiary, Woolstar, underpaid more than $1 million in long service leave to 1235 former employees between 2018 and 2021. The amounts underpaid ranged from as high as $12,000 for some employees to as little as $250.
The regulator, Wage Inspectorate Victoria, brought the case against Woolworths, emphasizing that failure to pay long service leave is a criminal offence in Victoria. Robert Hortle, the commissioner of Wage Inspectorate Victoria, expressed disappointment that a household name like Woolworths is facing underpayment allegations and expects businesses with significant payroll resources to comply with the law.
The first hearing in the case is scheduled for September 6. A Woolworths spokesperson stated that the issue was reported to Wage Inspectorate Victoria in February 2022 after an internal review discovered the failure to pay long service leave to some staff. Woolworths claims to have made back payments or corrected leave balances for affected team members, including interest and superannuation. The company has also apologized to the affected employees and implemented stronger payroll systems to address the identified long-service leave issues.
The Inspectorate has separate cases against other companies, including Optus, CommSec, and BankWest, over alleged breaches of long service leave laws. In 2021, Coles was found guilty of underpaying 4096 staff nearly $700,000 and was fined $50,000 for systemic failures in paying the entitlement.
Unlike some other workplace entitlements, long service leave applies to both casual and contract workers in Victoria, as well as permanent full and part-time employees. Victoria’s long service leave laws mandate that employees who have worked continuously with one employer for at least seven years are entitled to long service leave, and they should be paid any unused leave when they leave their job. Failure to comply with the law can result in significant fines and criminal convictions for companies.
Research commissioned by the inspectorate revealed that a majority of respondents were unaware of the entitlements for casual and contract staff, with many assuming that ten or more years of service were required to be entitled to leave. The commissioner, Robert Hortle, pointed out that the value of the underpayment goes beyond the monetary amount, as it robs workers of valuable time that could have been spent with family, travelling, or relaxing.
To address such issues, the Victorian government established the inspectorate in mid-2021 to enforce laws related to wage theft, child employment, long service leave, and independent contractors. Although the inspectorate has provisions to penalize bosses engaging in wage theft, these laws do not apply to long service leave.
In addition to the long service leave case, Woolworths has admitted underpaying thousands of staff $571 million in a wages scandal involving salaried managers in its stores. The company has attributed this to “inadvertent” errors. In the mid-2010s, workplace agreements between Woolworths and the Shop, Distributive and Allied Employees Association resulted in many workers, particularly those working nights, being paid well below the minimum wages set by the award, the wages safety net.
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