Woolworths and Coles now face billion-dollar liabilities over historic staff underpayments. An Australian Federal Court decision has triggered one of the largest employment compliance cases in the country’s history. Both supermarket giants must remediate tens of thousands of workers, as their failures to accurately pay entitlements stretch back over a decade.
Sweeping Court Decision Targets Retail Heavyweights
Woolworths and Coles received a judgment from the Federal Court. The court determined that both companies underpaid salaried managers and failed to keep accurate employment records since 2013. Federal Court Justice Nye Perram pointed to systemic flaws in the way both companies tracked rosters, overtime, and other staff entitlements. He stated, “This should not be done again”. The legal proceedings brought together claims by the Fair Work Ombudsman and two class actions led by Adero Law.
Liabilities Mount for Both Companies
Woolworths estimates a further liability between $180 million and $330 million after tax for remediation related to salaried store team leaders. Woolworths also warns that interest, superannuation, and payroll tax could add another $140 million to $200 million post-tax. The company had already paid $330 million to managers for historical underpayments as of September 2025.
Coles has provisioned for an extra $150 million to $250 million in remediation, which includes interest and additional costs. To date, Coles has paid $31 million in remediation for affected staff. Both companies face a combined estimated hit of up to $780 million.
Figure 1: Total underpayment liabilities for Woolworths and Coles
Issues Date Back Over a Decade
Records show that underpayments affected nearly 30,000 employees between 2013 and 2019. The majority of impacted staff were salaried store managers and supervisors. The court identified failures to record all overtime, keep proper rosters, and accurately account for allowances and penalties.
The Fair Work Ombudsman and affected employees argued that both companies’ internal remediation programs grossly underestimated the true amounts due. Annualised salary arrangements failed to reflect actual hours worked, resulting in underpayment for significant overtime.
Figure 2: Timeline of the Woolworths and Coles underpayment scandal from 2013 to 2025
Woolworths’ Official Response
Woolworths Chief Executive Amanda Bardwell stated, “We are focused on resolving these underpayment issues. We are committed to ensuring that our team members are compensated accurately”. Woolworths said its current estimate incorporates additional liabilities from historical underpayments and also addresses court findings on minimum breaks, set-off provisions, and overtime treatment from 2019 to 2025.
Woolworths has warned that the final financial obligation remains uncertain pending further legal proceedings. The company expects to update the market no later than February 2026 when it reports half-year results.
Coles’ Statement and Remediation Efforts
Coles says, “We have implemented new processes and safeguards to ensure this won’t occur again. We again apologise to our team members who were affected”. Coles said it had already initiated a remediation program, paying $31 million to date and holding a $19 million provision on its balance sheet for further liabilities.
Coles said it views the judgment as providing much-needed clarification regarding the industry’s award structure and the Fair Work Act. The company continues to work through the court’s findings to determine further impacts.
Figure 4: Coles commits to new safeguards and ongoing remediation after underpayment ruling
The Role of the Fair Work Ombudsman
The Fair Work Ombudsman initiated proceedings against both companies in 2020, following industry-wide concerns about annualised salaries not covering actual hours worked. The Ombudsman stated, “Businesses paying annual salaries could not adopt a set-and-forget approach”. The agency continues to pursue both rectification for underpaid employees and penalties against Woolworths and Coles.
Federal Court Outlines Industry-Wide Impact
Justice Nye Perram’s decision holds that Woolworths and Coles set a precedent for large and small businesses across Australia. The ruling will force retail and other sectors to reconsider how they track working hours, overtime, and entitlements under award arrangements.
The decision is “lengthy and complex” and introduces new requirements for accurate record-keeping and remuneration processes. A case management hearing is scheduled for October to discuss the next steps and determine the final compensation for about 27,700 affected employees.
Figure 5: A case management hearing is scheduled for October to discuss the next steps and final compensation
Market Reaction and Company Shares
Woolworths’ share price fell following the announcement of the court decision and new wage liabilities. Coles shares slipped 0.9% while Woolworths shares dropped by 0.5% in line with a broader market downturn.
Key Facts and Figures
- Combined potential liability: $780 million for both companies
- Woolworths: $180 million–$330 million after tax in further remediation; $140 million–$200 million for interest, super, and tax
- Coles: $150 million–$250 million in additional remediation; $31 million paid to date
- Total staff affected: about 27,700
- Period: Underpayments occurred 2013–2019 and extended to 2025 in some cases
Figure 6: Breakdown of 27,700 affected employees by job categories
Underpayment Scandal Puts Spotlight on Salary Compliance
The supermarket wage scandal began after workers discovered pay discrepancies compared to the hospitality award. Internal reviews found that rostering failures and absence of controls let underpayments persist for years. Legal action, class actions, and compliance reviews followed.
Broader Implications for the Retail Sector
The court’s findings require all companies to ensure that annualised salaries fully compensate for all hours worked, including unpaid overtime. Retailers with annual salary practices must reevaluate payroll systems and record-keeping practices.
The Fair Work Ombudsman and class action leaders contend that the underpayment cases at Woolworths and Coles reflect wider issues in the Australian retail sector.
Steps Taken to Address the Issue
Woolworths and Coles both introduced new compliance systems and policies since the discovery of underpayments. They updated employment contracts, improved roster tracking, and introduced better payroll audits and time-reporting procedures.
The companies say they will continue working with employee representatives and regulatory agencies to resolve outstanding cases.
Figure 7: Paid vs pending remediation costs for both supermarket chains
Affected Staff Seek Final Justice
Affected managers and salaried staff now await final compensation, with the Federal Court set to hold further hearings in October. Class action litigants argue that previous remediation did not go far enough and continue to seek additional entitlements and penalties against both supermarket groups.
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Regulatory Response Remains Ongoing
The Fair Work Ombudsman remains focused on enforcement and says Friday’s Federal Court decision will also guide other employers and employees under the General Retail Award. Broader sector-wide compliance is now front and centre for HR and payroll departments nationwide.
Senior Executives Under Scrutiny
The boards of Woolworths and Coles say their focus remains on “compliance and fair pay outcomes for team members”. Both companies have committed to full cooperation with regulators and any additional steps required under the Fair Work Act.
Auditors and external advisors continue to work on assessing remaining risk exposure for both companies. Investors and customers monitor developments as companies work to repair reputation and restore trust.
Conclusion: A Turning Point for Employment Practices
Woolworths and Coles face a watershed moment after the revelations of chronic underpayment and non-compliance with employment awards. The Federal Court’s findings and subsequent proceedings will set new standards for wage and record-keeping compliance in Australia’s corporate landscape. Both companies say they aim to deliver comprehensive remediation as required by law and restore confidence among their staff, shareholders, and the wider community.
FAQ: Woolworths & Coles
Woolworths
- What payment methods does Woolworths accept?
Woolworths accepts cash, all major credit and debit cards, mobile wallets such as Apple Pay and Google Pay, and Woolworths Gift Cards. Online payments include standard card payments and digital wallets. - How can I return or exchange items at Woolworths?
Customers may return or exchange items within a specific timeframe, usually with proof of purchase. Items must be in original condition unless faulty or damaged. Refund policies follow consumer law and Woolworths’ own guidelines. - What is Woolworths’ refund policy for expired or damaged products?
Woolworths offers refunds or replacements for products found expired or damaged provided customers present valid proof of purchase and notify the store within the return period. - How do I use Woolworths coupons and loyalty programs?
The Woolworths Everyday Rewards loyalty program allows customers to earn points on qualifying purchases. Coupons can be scanned at checkout or applied during online shopping to receive discounts. - What are Woolworths store opening hours?
Store opening hours vary by location but generally operate early morning to late evening. Hours can be confirmed via the Woolworths website or mobile app. - How do I track my online Woolworths order?
Customers can track orders via the Woolworths website or app using their order number. Notifications and updates are sent through email or SMS. - What is the Woolworths interview process like?
The interview process generally starts with an online application, followed by online assessments or video interviews. Shortlisted candidates may attend face-to-face interviews. The process assesses both skill and cultural fit. - How do I apply for a job at Woolworths?
Applicants submit online applications through the Woolworths careers portal. Users can create profiles, upload resumes, and apply for specific roles. - How do I use the Woolworths Everyday Rewards program?
Customers enroll online or via the app, scan their rewards card when shopping, and collect points which can be redeemed on future purchases or partner offers. - How do I contact Woolworths customer service?
Customers can contact Woolworths via phone, email, online chat, or in-store assistance. Contact details are available on the official Woolworths website.
Coles
- How do I manage my Coles account and payments?
Coles customers can access their accounts online for order management and payment settings. Payments can be made via credit/debit cards, vouchers, mobile wallets, and gift cards. - How can I request a refund or return a product at Coles?
Refunds or returns require proof of purchase and must be made within Coles’ return policy period. Defective or faulty goods are eligible for refund or replacement. - What are Coles’ store hours and locations?
Store hours and locations vary. Customers can use Coles’ online store locator tool to find details about specific store hours. - Can I use Flybuys points and other discounts at Coles?
Flybuys members earn points on purchases and redeem offers or discounts. Points can be tracked and managed via the Flybuys app and website. - How do I track a Coles online order or delivery?
Coles provides tracking details through emailed order confirmations and via the Coles website or app. - What jobs are available at Coles and how do I apply?
Coles offers jobs ranging from casual roles to specialist and management positions. Applications are via the Coles careers website with a multi-stage recruitment process. - What are common Coles interview questions?
Typical interview questions focus on customer service skills, teamwork, problem solving, and work availability. - How does Coles handle customer complaints?
Complaints can be submitted online, by phone, or in-store. Coles aims to resolve issues promptly and escalates more complex cases to a dedicated team. - What safety and hygiene policies does Coles have?
Coles follows strict industry standards for food safety and workplace health. Policies include regular sanitation, staff training, and compliance audits. - How do I contact Coles customer support?
Coles support is available via phone, email, live chat, and through social media channels. Contact info is accessible on the Coles website.
