“No excuses”: Woolworths payment problem causes $300 mill headache

If you’re involved in your organisations payroll and HR, this recent Woolworths wages shortfall will be of interest as it’s likely to have ramifications for all HR and payroll departments.

Woolworths has admitted to underpaying nearly six thousand staff to the tune of approximately $300 million and is now under investigation by the Fair Work Ombudsman (FWO).

The underpayment dates back to 2010, with the number of impacted employees expected to rise as the investigation continues. Woolworths is among several large Australian employers who have recently come forward admitting systemic payment problems.

Woolworths’ Managing Director and CEO, Brad Banducci has rejected claims that the payment was intentional—which if found to be the case could see wage theft charges laid.

The company has promised to make remuneration payments as soon as possible. “There are no excuses,” Mr Banducci said. “We intend to make a cash payment to all the employees impacted in 2018 and 2019 by the end of this calendar year.”

Despite them coming forward voluntarily, the FWO isn’t letting Woolworths off the hook, stating that “admission is not absolution,” and the company would still be prosecuted if found to have broken the law.

“Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” Ombudsman Sandra Parker said.

Secretary of the Retail and Fast Food Workers’ Union, John Cullinan, said the issue came about due to a failure in “simple maths”, and the impact on Woolworths’ workers is unprecedented.

“The scale of this so-called ‘mistake’ is huge,” Mr Cullinan said. “The value that has been lost from these workers, the opportunity to have had that money to have paid their mortgage, to be able to support their families, is a huge impact.”

This story comes as the Government announced its intention to legislate jail time for individuals found committing wage theft, and highlights the need for EAs involved in payroll to take extra care to avoid underpayment.