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Coles facing court for underpaying 7,800 staff $115 million

·Personal Finance Editor
·2-min read
The exterior of a Coles supermarket and a person removing $100 notes from a wallet.
The exterior of a Coles supermarket and a person removing $100 notes from a wallet.

The Fair Work Ombudsman (FWO) has brought legal proceedings against Coles Supermarkets for allegedly underpaying 7,812 employees $115 million.

Last year Coles told the FWO and the Australian Securities Exchange (ASX) that it was reviewing the pay of award-covered, salaried employees in its liquor and supermarket businesses.

The FWO said it assessed the wages and entitlements of thousands of salaried Coles employees, finding Coles had allegedly underpaid the employees between 1 January, 2017 and 31 March, 2020.

The FWO is alleging most of the underpayments were the result of Coles paying salaried employees annual salaries that were not enough to cover their minimum lawful entitlements, given they generally performed significant amounts of overtime work.

The FWO has alleged Coles’ remediation program “significantly underestimated amounts owed to the employees” and that more than $108 million remains outstanding.

Ombudsman Sandra Parker said underpayments had become a persistent issue among businesses of all sizes, across a number of different industries.

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers,” Parker said.

“Employers must ensure wages being paid are sufficient to cover all minimum lawful entitlements for the hours their employees are actually working and the work they are actually doing.”

Parker said ensuring remediation programs were being undertaken correctly by large employers reporting underpayments was a priority for the FWO.

“This court action against Coles should serve as a warning to all employers that they can face serious consequences if they do not prioritise workplace law compliance,” Parker said.

The alleged underpayment of these salaried managers ranges from small amounts to $471,647, and it’s alleged 45 of them were underpaid more than $100,000.

The FWO has alleged most of the underpayments are a result of underpaid overtime, public holiday rates and a range of other allowances.

Coles is now facing penalties of up to $63,000 per breach.

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