Coles has now joined rival Woolworths (and a host of other companies, listed and unlisted) in underpaying staff – in this case, some of its salaried managers.
Coles said on Tuesday it had now identified a total of $20 million in underpayments and interest costs for its salaried team members across its supermarkets and liquor businesses, becoming the latest major retailer to be caught up in an underpayment scandal.
Coles said around 1%, or 1150, of its team members, had been underpaid due to differences between their remuneration and the General Retail Industry Award (GRIA).
The underpayments occurred over the last six years and mainly affected salaried department managers in the core supermarkets business.
Coles indicated $12 million in back payments for those store members and $4 million in interest and additional costs will be taken against profits.
And around 5% of the company’s liquor salaried managers were also underpaid, with Coles warning of a further $3 million in provisions for back payments and an additional $1 million in interest and costs.
“We are working at a 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,” CEO Steven Cane said in Tuesday’s statement.
“Coles has implemented steps to improve our systems and processes.”
But analysts warn the total cost of the underpayment may be higher than the $20 million stated by Coles.
Coles found the discrepancies in a review which began last November after Woolworths revealed its $300 million underpayment problems. That also related to discrepancies between the general retail award and its staff’s payment agreements.
Other companies in a similar position include Super Retail Group which found it had underpaid some of its managers. There are a host of other companies, mostly in the food, cafe, hospitality and entertainment sectors that have also been found to have underpaid staff. In these cases its hourly employees.