Finance Work Coles hit with class action alleging up to $200m in underpayments to staff

Coles hit with class action alleging up to $200m in underpayments to staff

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Frenzied buying by Australians during the COVID pandemic has helped boost Coles' bottom line.
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Supermarket Coles faces a massive class action amid allegations it could owe up to $200 million to current and former staff.

Melbourne employment law firm Adero Law is representing about 150 current and former Coles staff members in the case – although it believes the issue of unpaid overtime could affect as many as 9000 salaried employees.

The case comes after Coles revealed in February it had underpaid about 600 salaried staff $20 million since 2014. It said 5 per cent of salaried managers in its liquor division were also underpaid, flagging $3 million in provisions for back pay and $1 million in interest and costs.

But in a statement on its website, Adero Law said that all levels of salaried managers in Coles’ supermarkets and liquor outlets were potentially eligible for back pay – up to and including store managers and store support managers.

Adero Law filed the class action covering more than 5000 current and former Coles workers in the Federal Court on Friday. It estimates the underpayment claim against the retail giant will be more than $150 million – and could be as much as $200 million.

The lead claimant is Maria Pabalan, who worked at three Coles supermarkets in Sydney in the past three years. She left the company in late 2019.

Ms Pabalan alleges she was regularly required to work excessive overtime and that clock-on and off times were manually altered to fit employees’ rostered times.

Her contract required her to work 40 hours a week, plus reasonable overtime. She said that when she raised concerns about the overtime, she was told it was unpaid and her salary was an “all in” arrangement.

“I was doing ridiculous hours and not being paid for it. I just got paid for a 40-hour week,” Ms Pabalan told The Sydney Morning Herald.

“I had my kids sleeping underneath the desk because I’d be there till eight, nine or ten o’clock trying to do the paperwork. I’d come in at five in the morning so I could drop off my son at childcare.”

She said managers were asked to clock-on and off at their rostered times and then continue working. She said their overtime was “flagging in the system” – which Coles said was unacceptable.

“The Coles class action is unique, in that there appears to have been little transparency, or indeed any work done to actually follow up on the admissions of underpayments,” Adero Law managing principal solicitor Rory Markham told trade publication Inside Retail.

“The level of under-reporting and the more concerning behaviour of amending time and attendance records, along with the culture of not recording accurate time, will be a strong feature of this litigation.”

In a statement to the ASX on Friday, Coles said it believed the class action was without merit, and it intended to defend it.

“Coles has committed to finalising its review and remediating affected team members as soon as possible,” it said.

“Coles has advised its existing team members of the issue and is aiming to commence remediation for relevant current team members in mid-2020 and former team members shortly thereafter.”