Woolworths’ turbulent week has plunged it into even deeper trouble. First, its CEO, Brad Banducci, faced potential jail time for refusing to answer questions in a Senate inquiry on supermarket price gouging. Now, the company has admitted in a Melbourne court that it didn’t properly pay long service leave to over 1,200 former employees in Victoria.
Between November 2018 and January 2023, Woolworths shortchanged these employees a total of $1.24 million. This shortfall ranged from a few hundred dollars to a staggering $12,000 for some individuals. The breach of Victoria’s Long Service Leave Act occurred a staggering 1,227 times, according to revelations in the Melbourne Magistrates’ Court.
Woolworths’ own audit of its IT systems brought these discrepancies to light, prompting the company to report the issue to Victoria’s Wage Inspectorate voluntarily. The admission of fault was deemed by Woolworths’ barrister Saul Holt KC as “the right thing to do.”
The potential penalty for these breaches could theoretically exceed an eye-watering $10.25 billion. However, such a hefty fine is unlikely, given the usual financial penalties in Victorian magistrates courts, which typically cap at around $480,000. Magistrate Nahrain Warda will deliver her decision on April 24.
But that’s not all. Kathleen Crennan, representing the Wage Inspectorate of Victoria, is pushing for Woolworths to be convicted, adding to the company’s woes.
Just two days prior, Woolworths CEO Banducci faced harsh criticism during the Senate inquiry, accused of spinning facts by Greens senator Nick McKim.
Despite the recent controversies, Woolworths’ barrister emphasised that the company is more than just negative headlines. Established in 1924, Woolworths boasts over 200,000 employees, referred to internally as “team members.” The company has apologised to affected individuals and is actively working to rectify the situation, ensuring former staff receive their due payments, including interest and superannuation.
This isn’t the first time Woolworths has faced underpayment issues. In 2019, it admitted to underpaying 5,700 salaried staff by as much as $300 million, primarily department managers across its retail stores.
The Fair Work Ombudsman and class action litigants are also pursuing legal action against Woolworths and Coles in the Federal Court over claims of widespread underpayments.
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