Woolworths fined $1.2-million for underpaying long service leave of employees

Widespread payroll failures blamed for underpayments

Woolworths fined $1.2-million for underpaying long service leave of employees

Woolworths Group Limited and its subsidiary Woolstar Pty. Limited have been fined over $1.2 million after failing to pay more than 1,000 employees their long service leave entitlements.

The Melbourne Magistrates' Court ordered a fine of $1,227,000 for Woolworths Group and $36,000 for Woolstar after they both pleaded guilty.

During sentencing, Magistrate Nahrain Warda considered the number of employees affected, Woolworths' self-reporting, guilty plea, and cooperation with authorities.

According to Warda, the underpayments were due to systemic and widespread payroll failures from Woolworths, which is expected to have "infallible payroll systems" as one of Australia's largest employers.

Robert Hortle, commissioner of Wage Inspectorate Victoria, said it was "disappointing" that Woolworths underpaid staff to such an extent.

"Victorians expect these large businesses to get this stuff right," Hortle said in a statement.

Woolworths underpayment

According to the Wage Inspectorate Victoria, Woolworths failed to pay more than $960,000 in long service leave entitlements to 1,191 former employees between November 2019 and January 2023.

Woolstar, on the other hand, failed to pay more than $45,000 in long service leave entitlements to 36 former employees between November 2018 and December 2022.

"Underpayments were as much as $12,000 which, calculated using the minimum wage, is equivalent to over 500 hours or 67 days leave," Hortle said.

According to Hortle, Woolworths miscalculated the long service leave so staff "weren't aware of their full leave entitlement."

"Each of these workers had been with Woolworths for at least seven years to qualify for long service leave, so it's loyal, long serving staff who have been affected," he added.

Woolworths' sentence should be a warning to businesses, particularly big corporations, who underpay their staff, according to Hortle.

"There are significant penalties for breaking long service leave laws and both the Wage Inspectorate and the court take underpayment of entitlements extremely seriously," he said.

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