Coles are the latest company to find themselves embroiled in an underpayment scandal.
The supermarket giant was found to have underpaid both supermarket and liquor (salaried) managers by up to $20 million over a six year period.
The error was announced in the retailer’s 2020 half-yearly results, released this morning, in which they stated their earnings before interest and taxes (EBIT) for the period (to January 5) took into account a salary discrepancies.
“Group EBIT also includes a provision of $20 million (comprising $16 million in Supermarkets and $4 million in Liquor) for estimated salary related payments, interest and on costs covering the prior six years, impacting less than 1% of our total team members, associated with the ongoing Award covered salaried team member review,” it reads.
Releasing a statement on the scandal, the company said they became aware of the discrepancy during a recent review of their remuneration framework, finding some employees had been paid below the General Retail Industry Award (GRIA).
Coles Group CEO Steven Cain said they had ‘implemented steps to improve systems and processes’.
“We aim to make Coles a great place to work, and apologise to those team members who have been unintentionally affected.
“We are working at pace with a team of external experts to finalise our review. Once completed we will contact all affected team members, both current and former, to remediate any identified differences in full.
In a timely coincidence, the Attorney-General and industrial relations minister Christian Porter released a discussion paper today, proposing businesses who underpay staff be named and shamed.
Disqualifying company directors where businesses have underpaid staff and establishing a formal mediator/conciliator at the Fair Work Commission for disputes between employers and staff are among other proposed measures.
“Like most Australians, the Government has been appalled by the number of companies that have recently admitted short-changing their staff – in some cases by hundreds of millions of dollars,” the Mr Porter said.
“While it’s understood the vast majority of these underpayments were not deliberate and were rectified swiftly, they are incredibly serious and border on negligence given we are talking about sophisticated organisations that should be capable of meeting their obligations under workplace law.
Coles aren’t the only retailer in hot water over underpayments. Retail rival Woolworths was last year found to have underpaid more than 5,500 staff by up to $300 million over a nine year period.
And just last week celebrity chef George Calombaris’ hospitality group Made Establishment folded less than a year after the company was embroiled in a high-profile wage scandal.