Woolworths Faces $10 Billion Fine for Underpaying Staff

Incident Overview

On Friday, 19 April 2024, Woolworths Group Limited pleaded guilty in the Melbourne Magistrates Court to over 1,000 charges related to the underpayment of long service leave entitlements to approximately 1,200 workers across its supermarket operations.

The underpayments, totalling approximately $1 million, occurred across 3,617 instances between January 2020 and July 2022, affecting former Woolworths and Woolstar employees. The company faces potential fines exceeding $10 billion, with sentencing scheduled for 24 April 2026.

Violation Details

During a payroll system review, Woolworths identified that it had failed to pay correct long service leave entitlements to certain former employees. The discrepancies were not fully identified and addressed until years after the company’s payroll system was changed in 2016.

Scope of Underpayment

• Affected workers: approximately 1,200 former employees
• Total underpayment: approximately $1 million
• Number of instances: 3,617
• Period: January 2020 to July 2022
• Affected employee groups: former Woolworths and Woolstar workers

Legal Proceedings

Woolworths pleaded guilty to over 1,000 charges in the Melbourne Magistrates Court. The company’s legal representatives emphasised Woolworths’ proactive self-reporting of the discrepancies and its cooperative engagement with the Wage Inspectorate Victoria as evidence of corporate responsibility and transparency.

Company Response

Woolworths’ defence characterised the company as an “exemplary employer” and highlighted its significant role as a major employer of young people in Australia. The defence argued against the imposition of maximum penalties, contending that severe fines could discourage other employers from self-reporting payroll errors in the future.

Judicial Commentary

The magistrate raised concerns about the delay in identifying and rectifying the payroll issues, noting that the problems persisted for several years after the 2016 payroll system change before being fully addressed.

Injuries / Fatalities

Fatalities

• None reported.

Injuries

• None reported.

Investigation Underway

The Wage Inspectorate Victoria conducted the investigation that led to the identification of the underpayments. Sentencing is scheduled for 24 April 2026, at which time the final penalties will be determined by the court.

In Summary

Workers or former employees of Woolworths or Woolstar who believe they may have been affected by long service leave underpayments are encouraged to contact the Wage Inspectorate Victoria on 13 10 50 or visit the Fair Work Ombudsman website at www.fairwork.gov.au for further information and support.