Coles and Woolworths Accused of Underpaying Workers in Overtime Scandal

The Federal Court has been informed that Coles and Woolworths cheated their employees out of overtime pay by implementing a payment system that deviated from Australia’s industrial awards system. The Fair Work Ombudsman and two class action claimants jointly initiated a trial against the supermarket giants, alleging that workers were underpaid over a span of several years.

Last week, Coles revealed that it had allocated an additional $25 million to reimburse salaried managers who were underpaid for an extended period, while Woolworths had previously acknowledged underpaying thousands of employees by approximately $390 million.

During the opening statement, Justin Bourke KC, the barrister representing the Fair Work Ombudsman, argued that the payment structure applied to certain workers was completely foreign and would inevitably have negative consequences for Woolworths, Coles, and their employees. He likened the situation to trying to fit a square peg into a round hole, emphasizing that it was incompatible.

Bourke directed Justice Nye Perram’s attention to the relevant award and contended that the specified work hours amounted to 38 rostered hours per week, but this did not align with the actual working conditions. He provided an extreme example of a team manager in Sydney who worked 13 hours per day, and he highlighted that other workers had average shifts of nearly 11 hours. He argued that such long hours were not due to unforeseen circumstances like equipment malfunctions.

According to Bourke, the evidence would demonstrate that the companies were required to meet clear standards and that they tacitly condoned the alleged illegal practices. He claimed that the companies were aware that employees consistently worked beyond the rostered hours. Bourke also criticized the supermarkets for their shortcomings in using informal rosters, providing time off in lieu, and maintaining records of worker overtime, penalties, and allowances. He emphasized that no one had blown the whistle on these issues.

Bourke contended that the supermarkets should not be able to use their limited and ad hoc records, which inadequately tracked aspects like time off in lieu, as a shield. He argued that they could not contractually evade their obligations under the Fair Work Act, stating that it should not function that way.

Bourke dismissed the notion that employees could simply leave if dissatisfied, asserting that this perspective was divorced from reality.

The trial is scheduled to continue for seven weeks.

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