Coles has underpaid staff an estimated $20 million

Supermarket giant Coles has underpaid around 600 workers in the region of $20 million over the last six years, CEO Steven Cain said on Tuesday.

The retailer began a wage review in November 2019, shortly after the news of Woolworths $300 million underpayments broke.

“We have identified that for less than 1 per cent of our total team members, there were some differences between their remuneration and the general retail industry award,” Cain said in a media call on Tuesday morning.

“We have taken provisions totalling $20 million across the Group for estimated salary related pavements, interests and on costs, covering the past six years and implemented steps to improve our systems and processes.”

The underpayments affect approximately 5 per cent of salaried Liquor managers and 5 per cent of salaried Supermarkets managers.

Coles notified Fair Work of the underpayments on Tuesday and Cain said that the review is ongoing.

The supermarket giant employs approximately 115,000 people and reiterated that the underpayments affect less than 1 per cent.

Coles has taken a provision of approximately $16 million in Supermarkets and $4 million in Liquor to cover the differences in payments.

Cain apologised to team members who have been “unintentionally affected”.

“We are working at pace with a team of external experts to finalise our review. Once completed we will contact all affected team members, both current and former, to remediate any identified differences in full,” Cain said.

“Coles has implemented steps to improve our systems and processes.”

Strong first half for Coles

The news overshadowed a solid first half for Coles, in which retail earnings of $725 million were recorded.

The recent indications of a strong Christmas period, drove an improved second-quarter.

Coles previously flagged earnings guidance of between $710 million and $730 million for the six months to January 5.

First half sales grew 3.3 per cent to $18.8 billion, with second-quarter comparative supermarket sales growth of 3.6 per cent.

Own brand sales performed strongly reaching more than $1 billion in December for the first time and recording 6 per cent growth in the first half.

More than 3000 new products were launched making it the most extensive range change in Supermarkets in recent years.

Coles Online grew by 24 per cent on the prior corresponding period and now accounts for 4 per cent of Supermarkets sales revenue.

During the half, the retailer also introduced Delivery Plus to its Coles Online. The subscription service allows customers to make unlimited orders for a flat monthly fee.

Comments

1 comment

  1. CJ Trainor posted on February 18, 2020

    I must disagree with you Edgar on expectations of small businesses. Coles has 115,000 employees across different states, with multiple awards, different industries, including hourly staff and salaried staff. The complexity is massive. Where as a small business (ie i office/shop) will have it much simpler with 1 state covering everyone and maybe only a couple of awards for all roles. But I agree the system could be simplified for everyone.

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