Woolworths Fined $1.2 Million for Underpaying Staff Long Service Leave
Supermarket giant Woolworths has been fined a total of $1,263,000 for underpaying hundreds of Victorian employees more than $1.24 million in long service leave entitlements. The underpayments, which ranged from a few hundred dollars to $12,000, occurred over multiple years due to an error in the company's payroll system.
Magistrate Nahrain Warda described the payroll error as a "systematic and widespread failure" by one of the nation's largest private employers. She noted that such a large corporation should have thorough payroll systems in place.
The court heard that Woolworths updated its payroll system in 2014 but didn't conduct an audit until 2020 after "red flags" emerged in 2019. The company self-reported the underpayment errors to Victoria's Wage Inspectorate after the discrepancies were detected during the review.
In sentencing, Magistrate Warda acknowledged that the large number of victims and the amount of the underpayments were significant aggravating features. However, she also noted that Woolworths had taken "proactive steps" to fix the payroll errors and had self-reported the underpayments.
Woolworths has agreed to pay back its workers what they are owed, plus interest. The company will also face a maximum penalty of more than $10 billion.
Commissioner of Wage Inspectorate Victoria, Robert Hortle, said that Woolworths' miscalculation of long service leave meant staff also lost out on time, not just money. He emphasized that underpayments were as much as $12,000, which is equivalent to over 500 hours or 67 days of leave.
Hortle expressed disappointment that Woolworths, with its significant resources, had underpaid staff to such an extent. He warned businesses across the state, particularly large corporations, that there are significant penalties for breaking long service leave laws and that the Wage Inspectorate and the court take underpayment of entitlements extremely seriously.
This incident follows a 2019 case where Woolworths admitted to underpaying 5,700 workers up to $300 million in unpaid wages and entitlements over a decade. The company posted a full-year profit of $1.6 billion last year, an increase of 4.6 per cent.