Woolworths is facing legal action for allegedly underpaying managers, with the workplace watchdog hunting more than $710,000 in outstanding back pay.
The Fair Work Ombudsman has launched Federal Court action against the supermarket giant over allegations it underpaid 70 salaried managers upwards of $1.1 million.
The regulator claims $713,395 has not been returned to the employees.
Woolworths disclosed underpaying thousands of employees in 2019 with the back-pay bill later calculated to cost the company about $390 million.
The admission sparked an investigation that assessed the records of 70 managers’ work between March 2018 and 2019.
The alleged underpayments range from $289 to $85,905 for the 70 managers over the one-year time frame.
The ombudsman alleges the most significant underpayments were Woolworths’ failure to pay the correct overtime entitlements to the salaried managers.
It will also try to prove annual salaries did not cover weekend and public holiday rates, meal allowances and annual leave loading, given the hours employees worked.
Fair Work Ombudsman Sandra Parker said it would be alleged salaried managers were significantly underpaid.
“This court action highlights that large employers face serious consequences if they do not prioritise workplace law compliance among other aspects of their business,” she said.
Woolworths employed about 19,000 salaried managers between June 2015 and September 2019.
Woolworths Group chief executive Brad Banducci welcomed the opportunity for the court to clarify the issue.
“Since 2019 our highest priority has been, and continues to be, addressing the issue of underpayments for our team, and to ensure that it doesn’t happen again,” he said.
In a statement, Woolworths said it was reviewing the proceedings and described the matter as having complex legal issues involved.
“They address issues over which there is considerable uncertainty,” the company statement said.
“The Woolworths Group remediation process to date has involved extensive calculations, assessment and review.”
Woolworths Group shares were trading lower by 1.56 per cent to $42.67 shortly after 1pm Friday (AEST).