Coles, Woolies staff stuck in mass underpayment case   

Sep 05, 2025
New Daily.



Allegations of rampant employee underpayment at Coles and Woolworths that affected almost 30,000 staff remain unresolved two years after a lengthy trial.

The Federal Court on Friday handed down a judgment on four cases against the supermarket giants after a watchdog argued there was tacit approval of illegal conduct in many stores.


Woolworths and Coles have repaid $330 million and $7 million respectively to managers who were not properly paid entitlements due to them as salaried employees.

But the Fair Work Ombudsman and former grocery store employees behind two class actions say the market leaders should be forced to pay more.

The watchdog argued the relevant award set out a 38-hour work week but there was tacit approval to allow people to work overtime regularly.

It claims there were failures in the use of “informal” rosters, time off in lieu and record-keeping on overtime, penalties and allowances.

But Woolworths said some employees were authorised to work up to 45 hours a week and they were not required to do overtime beyond that.

Coles argued managers had autonomy over their hours and the estimates of working hours and days were overestimated by the Fair Work Ombudsman.

Justice Nye Perram on Friday found both supermarket chains did not comply with their obligation to keep accurate employment records.

He noted Coles failed to operate an overtime system for managers and its clocking records were unreliable.


One of the lead litigants, who mostly managed the customer service desk, likely worked on days when she was not rostered so roster sheets were not indicative of the hours worked, the judge said.

Her phone records could better demonstrate when she was at work, the judge found, while dismissing Coles’s arguments she had not missed unpaid meal breaks.

It looks like the dark days of worker underpayments live on.   

Unions will go looking’: Woolies’, Coles’ $1b wage scandal could spark class action wave   


September 9 2024
Sydney Morning Herald

McDonald’s, KFC, Bunnings, Hungry Jack’s and JB Hi-Fi are among the retail giants that will need to examine whether they are paying staff correctly and could face a wave of new class action suits after a landmark Federal Court ruling forced Woolworths and Coles to set aside a further $780 million to back pay staff amid a ballooning years-long wages scandal.

On Friday, the Federal Court determined that Australia’s two largest supermarket companies failed to keep accurate records of rosters, overtime and other entitlements for more than 20,000 salaried workers for years, stretching back more than a decade.

Woolworths is setting aside more money for back pay.


Josh Cullinan, secretary of the Retail and Fast Food Workers Union, said the judgment made findings on several clauses that were ubiquitous in employment contracts across the retail and fast-food industry, whether staff were covered under the industry award or not.

“It goes a lot further than just Coles and Woolies. The judgment will reverberate right across retail in lots of different ways,” he said.

The Federal Court found Coles and Woolworths were not allowed to “offset” any underpayments in a pay period by overpaying in another pay period, a practice that Cullinan said was common across the “vast majority of retail”.

“We’ve always hated that,” he said. “A whole lot of these clauses have never been interpreted in these ways before, or litigated, and that’s very helpful to finally have.”

Employment lawyer Ian Neil, SC, said the key issues in the judgment were annualised salaries, coupled with inadequate record-keeping about hours worked and entitlements owed to staff.

“Those two factors together are not confined to Coles and Woolies, and nor are they confined to the retail industry,” Neil said.

Annual salaries had become more common over the past decade across industries including hospitality, construction and finance as employers felt such salaries were more convenient to pay, which Neil said was an “illusion”.


The findings will inspire future court cases of a similar kind, he said.

“It is clear that this union, and every union, as well as plaintiff law firms and litigation funders, will be looking. Why would they not, when they have these cases as a lesson for how to do it?”

The nation’s retail industry lobby group said it was alarmed by the implications for the broader retail sector, and said it was proof the General Retail Industry Award (GRIA) – which contains 994 pay rates over nearly 100 pages – was too complex.

“If it requires teams of lawyers and HR experts to interpret the GRIA, it’s clear the system is broken, and it is setting up businesses to fail,” Australian Retailers Association chief executive Chris Rodwell said.

“These outcomes move in the opposite direction to Australia’s recent efforts to lift productivity, creating a heavier regulatory burden for businesses already drowning in red-tape.”

Fast-food veteran Jack Cowin, executive chairman of Domino’s and founder of Hungry Jack’s, said Australia’s labour laws were much more complex and complicated “than anyplace else I’m aware of”.




“Somebody makes a mistake somewhere along the line – I would expect that’s what’s happened at Woolies and Coles. Someone’s made an error,” Cowin said. “From our company point of view, we spend a fair amount of time and energy to make sure we get it right.”

Ten Cap lead portfolio manager Jun Bei Liu said analysts broadly expected the supermarket giants to appeal against the findings, which could ultimately lower the final remediation figure that the Federal Court is yet to determine.

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Prices at Coles and Woolworths this month were more than 8 per cent higher than at Aldi.


“All of corporate Australia, large corporates, will be very, very careful in assessing what staff costs are,” Liu said.

On Monday, Woolworths and Coles both set aside a further $780 million in combined potential back pay. Woolworths paid and set aside far more than Coles.

Woolworths, which has already paid back more than $486 million to staff, will set aside a further half a billion dollars: $180 million to $330 million in remediation (post-tax), and a further $140 million to $200 million post-tax for interest, superannuation and payroll tax.

“This decision will require significant and widespread changes to accepted retail practice for Woolworths Group and Australian businesses, large and small,” the company said in a statement.

To date, Coles has repaid $31 million with a further $50 million to be paid, but in an update on Monday, it estimated it would have to back pay an additional $250 million.

whiteknight wrote on Sep 6^th, 2025 at 2:24pm:


And they always will as long as WW and Coles exist.

Horrible employers.