Woolworths, Coles Face Nearly $1B Repayment After Federal Court Ruling

Australia's two largest supermarket chains, Woolworths and Coles, face combined remediation costs potentially exceeding $1 billion following a landmark Federal Court ruling that found they underpaid nearly 30,000 salaried managers by failing to record overtime and other entitlements properly. The court determined that the companies breached Fair Work Regulations by using a 'set-off' annual salary arrangement that did not accurately cover employee entitlements for each pay period, requiring significant repayments for overtime, penalty rates, and allowances. Woolworths estimates additional costs between $250 million and $470 million pre-tax, with further liabilities for interest, superannuation, and payroll tax possibly adding $200 million to $280 million, while Coles expects to pay an additional $150 million to $250 million on top of previous repayments. Both companies acknowledged the complexity of the ruling and that further court hearings are scheduled to resolve outstanding issues related to interpreting the General Retail Industry Award (GRIA). The Fair Work Ombudsman initiated the legal action in 2021, highlighting the widespread impact this judgment could have on retail employment practices across Australia. A case management hearing is set for late October to determine the next steps and final compensation for affected employees.