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  • Coles (COL) has been accused of underpaying 7812 employees by $115 million between 2017 and 2020, according to an investigation by Fair Work in February 2020.
  • The industry watchdog claims Coles had breached record-keeping laws under the Fair Work 2007 Act including records related to overtime hours of employees
  • Coles informed the ASX it was launching a pay review for both its liquor and supermarket employees in February last year
  • As a result of its internal investigation, Coles concluded it owed an estimated $15 million in unpaid remuneration to its employees
  • Coles ended the day trading down 0.51 per cent at $17.65 a share

Coles (COL) has been accused of underpaying more than 7500 employees by $115 million between 2017 and 2020, according to an investigation by the Fair Work Ombudsman (FWO).

COL informed the FWO and the ASX in 2020 that it was evaluating the remuneration of award-covered, salaried staff in its liquor and retail divisions.

The Fair Work Ombudsman investigated the pay and entitlements of thousands of salaried Coles employees and discovered that Coles had allegedly underpaid 7,812 employees a total of $115.2 million between January 1, 2017, and March 31, 2020.

Fairwork is seeking back pay and penalties on behalf of the 7812 employees who were undercut by Coles.

Included in the underpaid was a manager who was underpaid a total of $471,647 over the three-year period and an additional 45 others who were shorted $100,000 each.

Managers were rostered 40 hours a week but allegedly stayed roughly one hour extra per shift in addition to wrongly paid weekends, public holidays penalty rates.

Furthermore, the industry watchdog claimed Coles had breached record-keeping laws under the Fair Work 2007 Act including records related to overtime hours of employees.

Fair Work has demanded penalties for multiple alleged breaches of workplace laws, on top of a court requiring rectification of the outstanding underpayments in full.

According to the FWO, the majority of the underpayments were caused by Coles providing paid staff yearly wages that were insufficient to fulfil their minimum legal obligations, despite the fact that they frequently completed large amounts of overtime work.

FWO claims Coles’ remedial scheme substantially understated sums due to employees, and more than $108 million remained unpaid.

Coles is not yet scheduled to attend Federal Court in Sydney.

According to the statement by Fair Work, Coles may face penalties of up to $63,000 per breach.

“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,” Fair Work Ombudsman Sandra Parker said.

Coles cold feet

Coles informed the ASX it was launching a pay review for both its liquor and supermarket employees in February last year.

As a result of its internal investigation, Coles concluded it owed an estimated $15 million in unpaid remuneration to its employees.

Thereafter, Fair Work began an investigation into the company regarding payment arrangements for a group of affected salaried team members.

Remuneration terms and conditions for salaried members are governed by the General Retail Industry Award 2010 (GRIA).

In response to Coles and Fair Work, workers filed a class-action for unpaid and underpaid wages and attempted suing the company for $150 million in May 2020.

To date, Coles has paid $13 million to the affected employees, while Fair Work claims the company still owes an additional $108 million.

In Thursday’s announcement, Coles said it had set an additional $12 million in provisional costs.

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to pay their workers,” Ms Parker said.

Coles ended the day trading down 0.51 per cent at $17.65 a share.

COL by the numbers
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