Woolworths uncovers underpayment cases at Big W, Dan Murphy’s

Woolworths has uncovered further cases of underpayment at its non-supermarket divisions, though the full amount owed to underpaid employees may be lower than initially expected.

The grocery giant’s chairman, Gordon Cairns, told shareholders at Woolworths’ annual general meeting on Monday the company had found cases of underpaid employees at its Big W, Dan Murphy’s and BWS stores, which it had flagged as a possibility in October.

Woolworths chairman Gordon Cairns and chief executive Brad Banducci will face a grilling on underpayments at today's AGM.
Woolworths chairman Gordon Cairns and chief executive Brad Banducci will face a grilling on underpayments at today’s AGM.Credit:Louie Douvis

“We fully expected to [find more cases] and we have,” Mr Cairns said. “But not to the same extent as in the supermarket business.”

On announcing the underpayment scandal earlier this year, which saw the retailer underpay 5700 staff for nearly 10 years over discrepancies with the general retail award, the company estimated the full amount would be between $200 million and $300 million.


Mr Cairns said the company had already paid 70 per cent of affected workers back for the past two years of missed wages and said the full quantum would be “at the bottom end” of the $200-$300 million range.

In speeches given to shareholders, Mr Cairns and chief executive Brad Banducci attempted to shine a positive light on the company’s wage scandal.

Despite Mr Cairns saying it was “incredibly disappointing”, he claimed the extensive investigation and executive pay cuts was a testament to Woolworths’s ethics.

Announced last month, Mr Banducci will forgo his short-term incentives, worth $2.6 million, and Mr Cairns will cut his chairmans’ fee by 20 per cent in response to the scandal.

“The overwhelming reaction from our team, customers and shareholders has been positive affirmation for the way the company has behaved,” he said.

The chief executive echoed these remarks, saying Woolworths needed to lift the bar on achieving its core value of ‘always doing the right thing’, and re-affirmed more consequences for executives would be considered by the board following the end of the review.

We fully expected to [find more cases] and we have. But not to the same extent as in the supermarket business.

Woolworths chairman Gordon Cairns

Woolworths also indicated its trading for the first half of the financial year has been “pleasing” thanks to a strong performance from its Lion King ‘Ooshies’ and Discovery Garden collectibles.

In the first quarter of the 2020 financial year, sales were up 7.1 per cent, including a comparable increase of 6.6 per cent for the company’s food division, driven by its Ooshies collectable campaign.

While not providing trading figures, Mr Banducci said positive sales momentum had continued across the company, including its food, department stores, and drinks division.

“We remain energised by the material opportunities we have across the Group to deliver value for both customers and shareholders over the remainder of F20 despite some uncertainty around the consumer environment,” he said.

Woolworths’ senior executives and board members are expected to face a grilling from shareholders over the underpayments scandal today, along with questions from union members over conditions in the business’ horticultural supply chains.

Later in the day, shareholders will also vote on the company’s $10 billion demerger of its drinks and hotels business, which will see a separate entity, Endeavour Drinks, likely list on the ASX next year.

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Source: Thanks smh.com