(Reuters) – Australia’s top supermarket chains Woolworths and Coles said on Monday they could incur millions in additional remediation costs following the federal court’s decision on historical underpayments to staff.
Woolworths expects A$180 million ($117.9 million)-A$330 million in post-tax charge and said interests and tax could add A$140 million-A$200 million to its net liability.
Coles, meanwhile, estimates an extra A$150 million-A$250 million in remediation bill.
The case against the two companies, which together ring up two-thirds of Australian grocery sales, was brought by the country’s industrial relations watchdog, Fair Work Ombudsman (FWO), in 2020.
The regulator had argued that the firms underpaid nearly 27,000 of their workers, with their internal remediation programmes ‘significantly underestimating’ the total amount due.
Woolworths said its estimate of the potential liability includes impact on all salaried store team members relating to the court’s ruling on overtime, and further remediation related to historical underpayments from 2013 to 2019.
The ruling was “lengthy and complex”, the supermarket chain said, adding that it was too early to consider an appeal.
Coles said it had already paid A$31 million in remediation costs to date, and that it was working to quantify the implication of the court ruling on its business.
Shares of Woolworths and Coles fell 0.5% and 0.9%, respectively, in line with a weaker broader marker.
($1 = A$1.5263)
(Reporting by Himanshi Akhand in Bengaluru; Editing by Sumana Nandy)
