The supermarket giant’s latest issue adds to mounting legal and financial pressure
Woolworths is facing a new class action in the Federal Court with the supermarket accused of underpaying staff in South Australia.
The claim, filed by Shine Lawyers on behalf of current and former employees, centres on alleged shortfalls in pay linked to work performed on Sundays.
The case focuses on a now-repealed South Australian law that treated Sundays as public holidays, potentially entitling affected workers to higher penalty rates.
Woolworths said the proceedings involve one of its subsidiaries and are based on interpretations of that former state legislation.
Australia’s largest supermarket chain maintains that it does not consider the action to be “market-sensitive” and has confirmed it will contest the claims in court.
This latest lawsuit follows an earlier class action, also targeting staff underpayments at Woolworths.
Investors reacted cautiously to the latest development, with Woolworths shares falling around 2.5% in Monday trading as the market digested the prospect of further legal and reputational fallout.
The company has already warned of a significant financial hit tied to historical wage issues.
Regulators are also circling. The Fair Work Ombudsman has launched separate legal proceedings against both Woolworths and rival Coles over alleged underpayments, signalling a broader crackdown on wage compliance in the supermarket sector.
Continued underpayment cases at some of Australia’s largest companies serve as a warning to employers about relying on broad “set‑off” clauses in contracts and about lax record-keeping.
In the case of Coles and Woolworths, the court found that attempts to use pooled, over-award salary payments over long periods to retrospectively cover shortfalls in specific pay periods did not meet the requirement to pay employees their full award entitlements each pay period.
Woolworths said that a "very preliminary estimate" of the one-off impact of the ruling would be between $180 and $330 million post-tax.
For employers, the key lessons are to draft any set‑off clauses narrowly and carefully and to strictly comply with statutory record-keeping obligations (including accurate records of hours and entitlements), as failures in these areas will likely fall “on” the employer in any underpayment dispute.
The new class action adds another layer of complexity to Woolworths’ efforts to draw a line under its wage underpayment saga and sets the stage for a legal battle over how much the company may ultimately owe its staff.
