Underpayment of long service leave

Potential Fine

Over $10 billion

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Woolworths has admitted in court to underpaying about $1 million in long service leave entitlements to approximately 1,200 workers, facing potential fines totaling over $10 billion.

Details of the Violation

During a payroll system review initiated by Woolworths, it was discovered that the supermarket had failed to pay correct long service leave to certain former employees. This issue, affecting former Woolworths and Woolstar workers, involved 3,617 instances of underpayment from January 2020 to July 2022.

Legal Proceedings

Woolworths pleaded guilty to over 1,000 charges related to these underpayments in the Melbourne Magistrates Court. The company’s legal representative highlighted Woolworths’ proactive approach in self-reporting and addressing the discrepancies as a demonstration of its responsibility and transparency.

Company’s Response and Legal Arguments

In court, Woolworths’ defense described the company as an “exemplary employer,” emphasizing its role as a significant employer for young people and its cooperative stance with the Wage Inspectorate Victoria. The defense argued against the imposition of the maximal fines, citing the potential discouraging effects on other employers regarding self-reporting errors.

Judicial Commentary and Upcoming Sentencing

The magistrate questioned the delay in identifying and rectifying the payroll issues, which were not fully addressed until years after the payroll system was changed in 2016. The court is set to sentence Woolworths on April 24, where the final penalties will be determined.

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