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Supermarket scandal: Coles reveals 1% club nobody wants to be in

Coles has revealed it underpaid staff. Image: Getty
  • Coles supermarket staff underpaid $12 million.

  • Liquor store staff underpaid $3 million.

  • Another $5 million set aside to cover costs and interest.

Coles supermarket store managers have been underpaid around $20 million over the last six years, the supermarket giant revealed on Tuesday morning. 

However, the Retail and Fast Food Workers’ Union (RAFFWU) believes the cost is likely to be closer to $200 million.

The salaried staff worked across its supermarkets and liquor stores, and comes after Woolworths revealed it had underpaid around 5,700 staff by $300 million. 

Up to 1,100 Coles workers are estimated to have been impacted.

“We aim to make Coles a great place to work, and apologise to those team members who have been unintentionally affected,” Coles Group CEO Steven Cain said. 

Impacted staff make up around 1 per cent of the company’s workers. Coles said the underpayments occurred due to a difference between the General Retail Industry Award and their actual remuneration. 

It did not impact the majority of Coles staff who are paid under an enterprise agreement. 

The near-finished review into Coles’ liquor business found around 5 per cent of salaried liquor managers were underpaid by around $3 million over the last six years. 

Additionally, around 5 per cent of salaried managers in its supermarkets were also underpaid, although that particular review is still underway. Coles estimates those underpayments total around $12 million. 

Coles store managers have been affected. Image: Getty

The supermarket has set aside another $5 million for interest and costs for all affected staff. 

“We are working at pace with a team of external experts to finalise our review. Once completed we will contact all affected team members, both current and former, to remediate any identified differences in full,” Cain said.

“Coles has implemented steps to improve our systems and processes.”

Asked whether the company is confident costs won’t blow out beyond $20 million during an earnings call on Tuesday morning, Cain said the review is ongoing but “as it stands today, that’s our best view of what the provision looks like”.

Any former salaried members can contact Coles on 1800 061 562.

Union calls for Royal Commission into wage theft

The RAFFWU has called for a Royal Commission into the extent of wage theft in Australia, in the wake of Coles’ admission.

“The latest exposure of massive wage theft comes after a year long investigation by RAFFWU,” Secretary Josh Cullinan said.

“Having conducted a forensic analysis of the payslips, timesheets, rosters and experience of many of our salaried members working at Coles, we know the reports of Coles are massively understating the wage theft.

“We believe the true quantum is closer to $200 million affecting many thousands of salaried workers.”

Coles makes $725 million in retail earnings

Coles has posted its half-year earnings. Image: AP

Coles today also reported its first-half retail earnings of $725 million, having earlier this month flagged guidance of between $710 million to $730 million.

Statutory profit fell 33.7 per cent to $489 million, while statutory revenue decreased 5.7 per cent to $19 billion.

Sales growth at Coles’ supermarkets came in at 3.6 per cent.

Coles first half buoyed by Christmas

* Retail sales revenue up 3.3pct to $18.8b

* Retail earnings up 0.4pct to $725m

* Statutory revenue down 5.7pct to $19b

* Statutory profit down 33.7pct to $498 million

* Maiden interim dividend of 30 cents, fully franked.

  • With AAP.

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