Woolies dubbed a 'model accused' over $1m pay bungle

Woolworths has lauded itself as an "exemplary employer" and "a model accused" in court as the supermarket giant admitted underpaying more than $1 million to about 1200 workers.

Two days after Woolworths' boss was threatened with jail for holding the Senate in contempt, the company faced Melbourne Magistrates Court where it pleaded guilty to more than 1000 charges.

Woolworths is facing a maximum penalty of more than $10 billion over the offending, prosecutors said on Thursday.

Barrister Kathleen Crennan, acting for the Wage Inspectorate Victoria, said the regulator was contacted in February 2022 by lawyers for Woolworths after it undertook a review of its payroll systems.

The supermarket chain discovered it was not paying some employees their long service leave entitlements after they left Woolworths, due to discrepancies in how those payments were being calculated.

Ms Crennan said the inspectorate investigated and found the underpayments occurred for former Woolworths and Woolstar workers on 3617 occasions between January 2020 and July 2022.

The regulator took the case to court and charged Woolworths for those who were underpaid sums of more than $250, which resulted in about $1 million in unpaid leave for 1227 former Victorian staff.

Woolworths' barrister Saul Holt KC admitted it was an "interesting week" to be discussing the supermarket in open court.

"But Woolworths is much more than some headlines and a senate inquiry," he said.

He said Woolworths was described as "a model accused" by the prosecution, as it had self-reported and self-investigated the underpayments to the regulator.

"Woolworths is an exemplary employer," he said, adding it was a major employer of young people aged under 25.

Mr Holt said the proposed $10 billion maximum penalty was "extraordinary" and asked the magistrate not to dole out such a high penalty as it could discourage other employers from self-reporting.

"There's an incredibly important policy imperative in encouraging employers ... to say when 'we find anomalies, we're not just going to fix them in the future, we’re going to go back and check'," he said.

Woolworths has since paid back most of the underpaid after alerting them via text message, email and post, and paid those they could not get in contact with into their last known bank account, he said.

Ms Crennan said Woolworths, as a major corporation with ample resources, should have put in place mechanisms to prevent the underpayments from occurring in the first place.

"With a corporation of these resources, across jurisdictions, there’s really no excuse for this to have happened," she said.

Magistrate Nahrain Warda asked why it took so long for Woolworths to discover the payroll issues, given it had changed systems in 2016.

"Why is it not until 2020 that the testing is, in essence, to ensure there are no anomalies? One would think that would be ongoing," she said.

"Woolworths can't escape from the fact that over that period those anomalies were not picked up, that should not have occurred and would not have occurred now because we know more," Mr Holt replied.

Woolworths will be sentenced on April 24.

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store