Woolworths is to be investigated by the Fair Work Ombudsman after it was revealed that it owes its staff up to $300m.
The supermarket giant told the stock exchange on Wednesday that it had found it may have underpaid 5,700 staff over a nine-year period.
These figures may increase as Woolworths also revealed it is currently conducting a extensive review of payment records.
In a press release, the Fair Work Ombudsman Sandra Parker was ‘frustrated’ at the amount of large businesses cropping up with admissions they’ve been paying their staff improperly.
“Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff. Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” Parker said.
“It is particularly concerning that many of these corporates have enterprise agreements in place that they negotiated but then failed to properly uphold the minimum standards. These sorts of careless missteps by business can be costly, often running up into the millions of dollars across an entire workforce.”
If Woolworths’ calculations prove accurate, their $300m underpayment would be double the $150m 7-Eleven underpayment scandal and dwarf the much-publicised $7.8m George Calombaris’ MAdE Establishment failed to pay workers.
“We encourage corporates to cooperate with us to rectify breaches, but they must understand that admission is not absolution. Companies should expect that breaking workplace laws will end in a public court enforcement outcome,” Parker said.
“I intend to take this issue up with Boards around the country, because frankly that is the level within organisations that should be taking an active leadership role on this issue and seeking assurance about compliance from executive managers.”
Ed Mallett, Managing Director and Founder of Employsure, says that cases like Woolworths’ underline the difficulty in remaining compliant with such legal complexity.
“It would be wrong to assume that all of these businesses are rogue operators. Also caught up in these figures will be small business owners who are trying their best in a very difficult system,” Mallett said.
“Employsure Advisers take thousands of calls each year from small business owners needing help. Wage rates and entitlements are always high on the list of issues they’re struggling with.
“Of course we want a system that eradicates systemic workplace relations breaches. But we also need a system that adequately supports small business owners and limits unnecessary complexity.
“We hope that the Government’s Workplace Relations System Review will address some of the issues that are making it near-impossible for the small business community to successfully navigate Australia’s workplace relations system.
“In particular we’d like to see reforms that limit vexatious unfair dismissal claims, while reducing the amount of red tape that prohibits small business growth.”