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Some Coles workers allegedly owed $100K

Supermarket giant Coles is being taken to court for allegedly underpaying thousands of workers more than $115 million.

The Fair Work Ombudsman (FWO) has begun Federal Court action against Coles Supermarkets Australia Pty Ltd, alleging 7,812 employees were underpaid between January 1, 2017 and March 31, 2020.

Most of the employees allegedly short-changed managed a department or function within a Coles supermarket, such as bakery, customer service, delicatessen, dry goods, fresh produce, meat and night-fill.

The alleged underpayment of these salaried managers ranged from small amounts to $471,647.

Forty-five of them were underpaid more than $100,000.

Most of the alleged underpayments relate to overtime entitlements under the General Retail Industry Award 2010.

The Fair Work Ombudsman has begun legal action against the retail giant. Photo: Sarah Marshall / NCA NewsWire

The FWO alleges Coles’ salaried managers were generally contracted and rostered to work 40 hours per week, but often worked more hours, with salaried managers alleged to have worked an average of about one hour on top of their rostered hours per shift between October 2017 and March 2020.

Weekend and public holiday penalty rates, allowances and other entitlements were also allegedly underpaid.

It is further alleged that Coles breached record-keeping laws under the Fair Work Act by failing to keep proper records, including some records relating to overtime hours worked by employees.

The affected workers were across every state and territory in regional and metropolitan areas.

“Coles’ remediation program has significantly underestimated amounts owed to the employees and that more than $108 million remains outstanding,” the ombudsman alleged.

Coles Group Limited told the FWO and the Australian Securities Exchange in 2020 it was reviewing the pay of award-covered, salaried employees in its liquor and supermarket businesses.

Coles is alleged to have underpaid workers more than $115 million. Photo: David Mariuz / NCA NewsWire

Fair Work Ombudsman Sandra Parker said underpayments resulting from insufficient annual salaries for employees covered by awards had become a persistent issue among businesses of all sizes, across different industries.

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers. Employers must ensure wages being paid are sufficient to cover all minimum lawful entitlements for the hours their employees are actually working and the work they are actually doing,” Ms Parker said.

Ms Parker said the FWO was making it a priority to ensure large employers reporting underpayments were correctly remedying them.

The case will be heard in the Federal Court in Sydney. Picture: David Mariuz / NCA NewsWire

“This court action against Coles should serve as a warning to all employers that they can face serious consequences if they do not prioritise workplace law compliance,” she said.

The FWO is seeking penalties against Coles for multiple alleged breaches of workplace laws, in addition to a court order requiring the company to rectify the total outstanding underpayments in full, plus interest and superannuation.

The company faces penalties of up to $63,000 per breach.

A Federal Court directions hearing in Sydney is yet to be scheduled.

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