Woolworths fined $1.3m for short-changing former workers in Vic

Woolworths has been fined AU$1.2 million (NZ$1.3 million) after admitting it failed to pay out more than AU$1 million (NZ$1.1 million) in leave entitlements to about 1200 Victorian workers.

The supermarket giant was facing a maximum penalty of more than AU$10 billion (NZ$11 billion), but Melbourne Magistrate Nahrain Warda today found the smaller fine to be suitable punishment.

Woolworths self-reported its breaches to Victoria's wage watchdog in February 2022 after it undertook a review of its payroll systems.

It discovered some of its employees were not paid their long service leave entitlements after leaving the company due to discrepancies in payment calculations.

The Wage Inspectorate Victoria's investigation found the underpayments happened on 3617 occasions between January 2020 and July 2022.

The company was charged for those who were underpaid more than AU$250 (NZ$274.50), which resulted in about AU$1 million (NZ$1.1 million) in unpaid leave for 1227 former Victorian staff.

Woolworths pleaded guilty on April 18 in Melbourne Magistrates Court to the more than 1000 charges laid down by the inspectorate.

The company's barrister Saul Holt KC said Woolworths had been described as a "model accused" by prosecutors as it had self-reported and self-investigated the underpayments.

He urged the magistrate to steer clear of the proposed AU$10 billion (NZ$11 billion) maximum penalty.

In sentencing today, Warda said long service leave entitlements were inherently important to employees and it was incumbent on corporations to ensure they were paid correctly.

The sheer number of victims, the protracted period of the offending and the amount that was underpaid were all aggravating features, Warda said.

But she noted Woolworths had self-reported, co-operated with the regulator's investigation and apologised to the victims before any charges were laid.

The former employees were also compensated and offered support through a dedicated service set-up after the offending, the magistrate said.

She fined Woolworths AU$1,277,000 (NZ$1,401,963) without conviction, while its subsidiary Woolstar was handed a AU$36,000 (NZ$39,523) penalty.

Wage Inspectorate Victoria commissioner Robert Hortle said the sentence should act as a warning to other corporations.

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

"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."

Woolworths was ordered to pay the regulator's AU$15,000 (NZ$14,468) legal costs.

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