Woolworths Fined 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 Woolworths' payroll system. The error went undetected for years until "red flags" emerged in 2019, prompting an audit in 2020.
Woolworths self-reported the underpayment errors to Victoria's Wage Inspectorate and has agreed to pay back its workers what they are owed, plus interest.
In sentencing, 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 the large number of victims and the amount of the underpayments were "significant aggravating features". However, she also acknowledged that Woolworths had taken "proactive steps" to fix the payroll errors and had self-reported the underpayments.
Woolworths was fined $1,227,000 and its subsidiary Woolstar $36,000. The company would have been fined $2.2 million if it had not pleaded guilty. The court heard that Woolworths had faced 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 underpayment of entitlements is taken extremely seriously by both the Wage Inspectorate and the court.
This incident serves as a reminder to businesses across the state, particularly large corporations, that there are significant penalties for breaking long service leave laws.