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Woolies’ $300m wage scandal expands to include Dan Murphy's, BWS staff

Jessica Yun
Woolworths CEO Brad Banducci (left) and Woolworths chairman Gordon Cairns are seen during the Woolworths Group AGM at the International Convention Centre in Sydney, Monday, December 16, 2019. (AAP Image/Bianca De Marchi)
Woolworths CEO Brad Banducci (left) and Woolworths chairman Gordon Cairns are seen during the Woolworths Group AGM at the International Convention Centre in Sydney, Monday, December 16, 2019. (AAP Image/Bianca De Marchi)

Woolworths Group chairman Gordon Cairns has revealed that the Woolworths underpayment scandal – which saw nearly 6,000 workers underpaid by $300 million across a decade – also involved staff from liquor arms Dan Murphy’s and BWS.

Speaking to shareholders in Sydney today, Cairns said Woolworths had “fully expected” to find more instances of underpayment across the other businesses, “and we have”, though “not to the same extent as in the supermarket business.”

The discovery that so many staff had been underpaid was “incredibly disappointing”, he said at today’s annual general meeting (AGM).

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“It was brought to our attention by three of our team members in February this year. We immediately investigated, found their assertions about their individual circumstances to be correct, and we remedied.

“We then began an across-the-board investigation, which continues given we are checking every shift for every salaried team member back as far as this has been an issue or records exist.”

He added that he and CEO Brad Banducci were “accept[ing] responsibility by voluntarily taking reductions in [their] pay”: Banducci would forfeit his short-term incentive while Cairns would cop a 20 per cent reduction in his director’s fees.

In late October, the supermarket giant’s CEO Brad Banducci had said he was prepared for his bonus to be cut as a result of the underpayment scandal. Last financial year, the chief executive took home a paypacket of $2.66 million, as well as $4 million in bonuses.

"I fully expect to have a conversation with the board on the consequences of this and I fully expect it will be impacting bonuses for myself and maybe there will be other things that come out of it,” he said at the time.

"We apologise to our team, we're going to make it right, but it's a very complex issue.”

Law firm Adero Law has filed a class action against Woolworths, estimating that the actual bill is over $620 million.

“Adero is instructed that current and former Woolworths employees have suffered underpayments and systemic wage theft during their employment at Woolworths on a far greater scale than the retail giant has disclosed,” Adero’s website stated.

But Woolworths has said it will “fully defend” the proceedings.

“In the context of its commitment to fully remediate all affected salaried team members, Woolworths Group believes the class action proceedings are without merit,” the supermarket giant said.

“Woolworths estimates that the one-off impact for remediation is expected to be in the range of $200-300 million (before tax).”

The retail sector union, SDA, has called on Woolworths to “fully audit and investigate” staff contracts in all their businesses, including Big W, Dan Murphys and BWS.

“Any underpayments occurring at Big W or Dan Murphy's need to be fixed by Woolworths with utmost urgency as they are for supermarket staff,” SDA national secretary Gerard Dwyer told Yahoo Finance.

“Wage compliance is every employer’s responsibility and obligation.”

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