Woolies says the underpayment was uncovered in a review triggered this year by the implementation of a new enterprise agreement covering its supermarkets and Metro stores.
It has only analysed two years of data but says the issue could date back to 2010, which it expects will result in a one-off remediation charge of between $200 million and $300 million in February’s first-half results.
The company said a review would now be extended to all its Australian businesses, which include Big W department stores and Dan Murphys liquor.
“As a business we pride ourselves on putting our team first, and in this case we have let them down,” group chief executive Brad Banducci said in a statement.
“We unreservedly apologise.”
The company said interim back payments covering the data analysed so far will be made before Christmas.
It said the majority of the staff affected are current and former salaried department managers at store level, with none of the 145,000 people covered by an enterprise agreement affected.
The announcement overshadowed the release of Woolies’ first-quarter sales growth that, driven by the success of its Lion King Ooshies and Discovery Garden checkout giveaways, comfortably beat that announced on Tuesday by fierce rival Coles.
Comparable sales at Woolworths’ supermarkets rose 6.6 per cent on the same period a year ago, easily trumping the 0.1 per cent from Coles.
Shares in Woolies were worth $37.73 before Wednesday’s open, up 28.25 per cent this calendar year.
The company said retrieving and reviewing rostering, time and attendance, and payroll data across all businesses is expected to take at least until September 30 to complete.
Repayments will be made as soon as each respective year of the review is completed.
The company has reported the matter to the Fair Work Ombudsman.
Woolies entered into a new compliance partnership with Fair Work last year after it was discovered that three cleaning companies and a former sole trader were underpaying Korean cleaners at Woolworths’ sites in Tasmania.
In 2014, Fair Work took legal action against two sub-contractors operating at several Coles sites for underpaying 10 trolley collectors over $200,000.
Want to comment?
Send us an email, making it clear which story you’re commenting on and including your full name (required for publication) and phone number (only for verification purposes). Please put “Reader views” in the subject.
We’ll publish the best comments in a regular “Reader Views” post. Your comments can be brief, or we can accept up to 350 words, or thereabouts.
InDaily has changed the way we receive comments. Go here for an explanation.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help InDaily continue to uncover the facts.