Australia’s workplace watchdog the Fair Work Ombudsman announced it launched legal action in the Federal Court against supermarket group Woolworths Group Limited and Woolworths (South Australia) in relation to major underpayments of salaried managers.

Australia’s largest supermarket operator told the Fair Work Ombudsman and the Australian Securities Exchange in 2019 that it had underpaid thousands of salaried employees in its supermarkets and metro stores.

The regulator then investigated the underpayments of the managers and assessed the records of a sample of 70 in-store salaried managers for their work between March 2018 and March 2019.

The Ombudsman alleges that Woolworths Group Limited underpaid those 70 employees a total of AUD 1,172,282 (USD 884,251) during this period. Despite back-payments, the Ombudsman alleges that a total of AUD 713,395 (USD 538,113) of underpayments remains outstanding to these employees.

The workplace watchdog said it is seeking court orders for Woolworths Group Limited to rectify the total outstanding underpayments in relation to the 70 managers whose records were assessed, and for both companies to then apply those calculation methods to rectify any underpayments owed to all other affected salaried managers, plus interest and superannuation.

Fair Work Ombudsman Sandra Parker said that addressing allegations of non-compliance in the corporate sector and ensuring remediation programs were being undertaken correctly was a priority.

“We allege that Woolworths failed to ensure that annual salaries were sufficient when compared to the actual hours worked, leaving their salaried managers significantly underpaid,” Parker said. “We also allege that significant underpayments have not been fully back-paid, and we will seek court orders for Woolworths to recalculate and rectify all underpayments for all affected employees.”

The Ombudsman also alleges that the underpayments for the 70 managers range from AUD 289 to AUD 85,905 (USD 217.95 to 64,785) during the one-year timeframe. They were all full-time employees, engaged as team support, team managers or duty managers, and based primarily in Sydney, Melbourne or Brisbane.

According to the Ombudsman, Woolworths Group Limited and Woolworths (South Australia) Pty Limited also failed to make or keep records which specified the number of overtime hours worked by the salaried managers or that detailed the loadings, penalty rates or monetary allowances applicable to the hours worked by the salaried managers.