In a recent development, the Fair Work Commission (FWC) has recommended that Woolworths take all necessary actions to ensure it pays affected distribution centre workers their owed backpay by the end of this month. This decision comes after repeated delays by the supermarket giant in addressing underpayments to its employees.
The issue traces back to a calculation error by Woolworths, which underpaid distribution workers entitled to an exemption rate from February 2017 to November last year. The company mistakenly calculated the hourly rate for exempt workers by dividing the weekly rate by 40 hours instead of the correct 38 hours. Woolworths identified and corrected this error in November of the previous year, ensuring proper payments since then.
However, despite acknowledging the mistake, Woolworths has lagged in compensating the workers for the underpayments. In response to a query from the Shop, Distributive and Allied Employees Association (SDA) last year, Woolworths projected that it would complete the backpay process, including interest and superannuation payments, between April and June of this year.
Frustrated by the delays, the SDA filed a dispute with the FWC in May, citing underpayment under section 739 of the Fair Work Act. This dispute involved members covered by the Woolworths Group Limited Brisbane Regional Distribution Centre Enterprise Agreement 2021. Woolworths informed the Commission in early June that it intended to address the underpayments for the Brisbane Regional Distribution Centre workers first, among its 20 distribution centres.
Woolworths indicated it could commence backpayments from August 12. However, Commissioner Jennifer Hunt warned that if Woolworths failed to act promptly, she might issue a formal recommendation. By late July, Woolworths and the SDA agreed on a deadline of the end of August for the backpayments, leading the SDA to request a formal recommendation from the FWC to reinforce this commitment.
Commissioner Hunt issued a recommendation on August 2, advising Woolworths to ensure the payments to affected members at the Brisbane Regional Distribution Centre by August 31. She noted the prolonged delays by Woolworths and emphasised the need for prioritising the payments to the affected employees.
“Whilst the remediation project is, no doubt, a large one, employees ought not be left waiting any longer for money that is owed to them,” Commissioner Hunt stated. “If Woolworths needs to prioritise the payment to affected members employed at the BRDC on account of this dispute being before the Commission, it ought to do so.”
A Woolworths Group spokesperson confirmed that the company expects to complete the backpayments, including interest, superannuation, and any other entitlements, by the end of the month. The spokesperson explained that Woolworths discovered the underpayments during a comprehensive payroll review that began in 2019. However, the current dispute specifically concerns the underpayments at the Brisbane distribution centre.
An SDA representative disclosed that the underpayments affected 40 to 50 employees at the Brisbane distribution centre, with amounts owed ranging from a few hundred dollars to over $10,000, cumulatively exceeding $100,000. SDA Queensland branch secretary Justin Power expressed disappointment over the lengthy resolution process but acknowledged Woolworths' commitment to rectifying the issue with interest.
“We are disappointed with the amount of time it has taken to get this backpay issue resolved, but appreciate that at no stage did the company argue against making good backpay with interest,” Power said. “The important thing is that our members will get the benefit of this and get paid what they deserve.”
This situation underscores the critical importance of accurate payroll calculations and timely rectification of errors to ensure that employees receive their rightful entitlements without unnecessary delays.
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