Around 20,000 current and former Woolworths employees will get $2,500 compensation after the supermarket giant settled a class action on underpayments that will cost it $50 million.
Canberra law firm Adero Law filed the class action lawsuit in late 2019 after it was found the supermarket had been underpaying staff across several years.
Woolworths revealed in October 2019 that it had underpaid some 5,700 staff an estimated $300 million, with underpayments stretching as far back as 2010 due to payroll miscalculations.
But according to Adero Law, which filed the lawsuit following Woolworths’ admission, the bill was likely more than double that sum.
More than $370 million in owed money has already been back paid to current and former workers who were underpaid between September 2013 and September 2019.
Under the class action, however, Woolworths has no legal obligations to pay back underpaid workers beyond six years ago.
But since the supermarket no longer holds records of rosters and timesheets between 2010 and mid-2013, the chain is making ex gratia, or voluntary, payments of $2,500 to each staff member who worked for them.
These payments to the 20,000 workers employed during that period are separate to those made to 5,700 staff who have already been backpaid.
“In the absence of those records, it is not possible to determine whether there were payment shortfalls across the salaried team members in this period, nor to identify which team members may have been affected,” Woolworths said in a statement to the ASX.
“Nevertheless, Woolworths Group remains committed to doing the right thing by its team members, given it is possible there may have been underpayments against the requirements of the General Retail Industry Award (GRIA) during this period, even with the steps taken in 2010.”
Salaried workers covered under the GRIA who worked for the company for at least six months between 1 January 2010 and 1 September 2013 will be eligible for the $2,500 payments.
Employees who worked during that time frame for any Woolworths supermarket, Metro, Big W, and Dan Murphy’s and BWS businesses, which were owned by Woolworths at the time, will be eligible for the payments.
Woolworths CEO Brad Banducci said he was pleased that the class action had been settled.
“We’ve worked through hundreds of millions of records as quickly as we can to ensure former and current team members have been paid what they were entitled to, plus interest and superannuation,” he said.
“We said at the outset that we would extend our review beyond our legal obligations and look back to 2010.
“With detailed analysis challenging in the earlier years, we felt an equal and broad-based payment to all potentially impacted team members was a fair and equitable way to approach remediation for this period.”
Former employees of Woolworths who believe they are eligible for the payment can get in touch with the supermarket and register their details here.
The pandemic saw Woolworths’ profits soar by nearly $1.14 billion in the second half of 2020.
The supermarket is facing an outstanding civil proceeding from the Fair Work Ombudsman (FWO), which is seeking repayments as well as penalties.
The class action settlement will be subject to court approval and the outcome of the FWO matter.