Woolworths Group has apologised after a review found that approximately 5,700 salaried store team members working in its supermarkets and Metro stores had not been paid in full compliance with obligations under the General Retail Industry Award.
In its statement to the share market on October 30, 2019, the problem was identified that annual salaries for store team members that were set to cover ordinary working hours and reasonable overtime were not high enough for either the employees’ contractual salary entitlements, or what they otherwise would have earned for actual hours worked under the award.
The review has found the number of hours worked, and when they were worked, was not adequately factored into the individual salary settings for some salaried store team members.
Under most awards an employer can pay a higher annualised salary to cover various award entitlements, including minimum weekly wages, allowances, overtime, penalty rates and annual leave loading.
However, if an employer gets those salary amounts wrong, or does not keep track of the actual hours the employees are working, then the employer may be breaching the award and find itself in Woolworths Group’s situation.
As the Financial Review reported, the problem of underpaying annualised salary employees has been the primary cause behind a recent spate of high profile multi-million-dollar underpayments.
Indeed the government are considering imposing criminal sanctions for serious wage theft.
The Fair Work Commission has also recently handed down a decision, which will impact employers paying annualised salaries under a Modern Award. Those new changes will start from March 1, 2020.
Even ASX 20 listed companies can get it wrong and if you do get it wrong, as Woolworths Group apparently has and is finding out, it can be expensive both in terms of dollars and reputation.
At Hillhouse Legal Partners, we are experienced in employment law matters and can assist employers through what is frankly a complicated and ever changing system of laws, rules and regulations.
We can assist you with complying with Awards and draft Employment Agreements for your business that will ensure that you are in compliance with any Awards and the law.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.