[Australia] Criminal charges against Woolworths for unpaid long service leave

In Australia, supermarket chain Woolworths is facing more than 1,000 criminal charges for allegedly failing to pay long service leave to workers in Victoria, The Age reports.

The charges were filed in Melbourne Magistrates’ Court, they allege that Woolworths - one of the country’s largest employers - and a subsidiary underpaid 1,235 former workers more than $1 million in long service leave.

In Victoria, failure to pay long service leave is a criminal offence. Wage Inspectorate Victoria - the regulator - brought the case against Woolworths and its subsidiary Woolstar, claiming the alleged underpayments occurred between 2018 and 2021.

The amounts underpaid reportedly ranged from $250 to as much as $12,000 for some employees.

“Victorians expect businesses with significant payroll resources to get this stuff right,” Robert Hortle - the commissioner of Wage Inspectorate Victoria - said.

“They’d be disappointed to see a household name facing underpayment allegations.”

The first hearing in the case against Woolworths is reportedly listed for September 6.

A Woolworths spokesperson said the issue was reported to Wage Inspectorate Victoria in February 2022 following an internal review which found that the company had not paid long service leave to some staff.

“We have since made back payments or corrected leave balances to affected team members, including interest and superannuation,” the spokesperson said.

“We have apologised to affected team members and strengthened our payroll systems to address the long service leave issues we identified.”

The spokesperson stated that it would not be appropriate to comment further because the case was before the court.

The Inspectorate has separate cases against Optus, CommSec and BankWest before the court over alleged breaches of long-service law. Coles was found to have underpaid 4,096 staff a total of nearly $700,000 in 2021.

Coles pleaded guilty to seven rolled-up charges and was fined $50,000 in Melbourne Magistrates’ Court. Magistrate Justin Foster reportedly said there had been a “systemic failure” by Coles to pay the entitlement.

Long service leave applies to casual and contract workers in Victoria, together with permanent full and part-time employees, unlike some other workplace entitlements.

Long service leave laws in Victoria mean all employees who have worked continuously with one employer for at least seven years are entitled to long service leave. Under the law, they must be paid any unused long service leave once they leave their job.

Failure to pay the leave can lead to large fines and criminal convictions for companies.

In addition to the issues around the long service leave, Woolworths has admitted underpaying thousands of staff $571 million as part of a wages scandal involving salaried managers in its stores. The supermarket reportedly claimed this was due to “inadvertent” errors.

In the mid-2010s, previous workplace agreements between Woolworths and the Shop, Distributive and Allied Employees Association saw a significant number of workers - night workers in particular - paid well below the minimum wages of the award, the wages safety net.

Woolworths’ underpayments were uncovered via an investigation by The Age and The Sydney Morning Herald in 2015-16. The investigation also revealed widespread underpayments at major retailers and fast food outlets including Coles, KFC and McDonald’s.

Source: The Age

(Links and quotes via original reporting) 

In Australia, supermarket chain Woolworths is facing more than 1,000 criminal charges for allegedly failing to pay long service leave to workers in Victoria, The Age reports.

The charges were filed in Melbourne Magistrates’ Court, they allege that Woolworths - one of the country’s largest employers - and a subsidiary underpaid 1,235 former workers more than $1 million in long service leave.

In Victoria, failure to pay long service leave is a criminal offence. Wage Inspectorate Victoria - the regulator - brought the case against Woolworths and its subsidiary Woolstar, claiming the alleged underpayments occurred between 2018 and 2021.

The amounts underpaid reportedly ranged from $250 to as much as $12,000 for some employees.

“Victorians expect businesses with significant payroll resources to get this stuff right,” Robert Hortle - the commissioner of Wage Inspectorate Victoria - said.

“They’d be disappointed to see a household name facing underpayment allegations.”

The first hearing in the case against Woolworths is reportedly listed for September 6.

A Woolworths spokesperson said the issue was reported to Wage Inspectorate Victoria in February 2022 following an internal review which found that the company had not paid long service leave to some staff.

“We have since made back payments or corrected leave balances to affected team members, including interest and superannuation,” the spokesperson said.

“We have apologised to affected team members and strengthened our payroll systems to address the long service leave issues we identified.”

The spokesperson stated that it would not be appropriate to comment further because the case was before the court.

The Inspectorate has separate cases against Optus, CommSec and BankWest before the court over alleged breaches of long-service law. Coles was found to have underpaid 4,096 staff a total of nearly $700,000 in 2021.

Coles pleaded guilty to seven rolled-up charges and was fined $50,000 in Melbourne Magistrates’ Court. Magistrate Justin Foster reportedly said there had been a “systemic failure” by Coles to pay the entitlement.

Long service leave applies to casual and contract workers in Victoria, together with permanent full and part-time employees, unlike some other workplace entitlements.

Long service leave laws in Victoria mean all employees who have worked continuously with one employer for at least seven years are entitled to long service leave. Under the law, they must be paid any unused long service leave once they leave their job.

Failure to pay the leave can lead to large fines and criminal convictions for companies.

In addition to the issues around the long service leave, Woolworths has admitted underpaying thousands of staff $571 million as part of a wages scandal involving salaried managers in its stores. The supermarket reportedly claimed this was due to “inadvertent” errors.

In the mid-2010s, previous workplace agreements between Woolworths and the Shop, Distributive and Allied Employees Association saw a significant number of workers - night workers in particular - paid well below the minimum wages of the award, the wages safety net.

Woolworths’ underpayments were uncovered via an investigation by The Age and The Sydney Morning Herald in 2015-16. The investigation also revealed widespread underpayments at major retailers and fast food outlets including Coles, KFC and McDonald’s.

Source: The Age

(Links and quotes via original reporting)