Australian supermarket giants Coles and Woolworths Group are set to incur up to A$780m ($511m) in additional remediation costs following a Federal Court judgment concerning the historical staff underpayments.
The proceedings on the class actions and a class action over the groups’ interpretation and application of the General Retail Industry Award 2010 (GRIA) and the Fair Work Act were brought by the Fair Work Ombudsman (FWO) in 2021 .
Following a Federal Court ruling, Coles has revealed a potential need for an additional A$150m to A$250m in remediation costs.
Woolworths has announced that its potential post-tax liability might reach A$530m. This includes further compensation for historical underpayments to salaried store team leaders from 2013 to 2019, alongside subsequent interest, superannuation contributions and payroll tax costs.
Coles has already paid A$31m in remediation costs and has a A$19m provision reflected in its financial statements.
Coles has warned against speculative estimates and states that the judgment is complex, with further court hearings needed to resolve outstanding issues.
The preliminary estimate includes potential interest and on-costs but does not account for any penalties or costs associated with the class action, which significantly overlaps with the FWO proceedings.
Woolworths Group has also conducted a review of the court's decision, estimating a one-off impact of between A$180m and A$330m post-tax for further remediation to salaried store team leaders.
This estimate could increase by A$140m to A$200m post-tax once interest, superannuation and payroll tax are factored in.
Woolworths has already undertaken extensive remediation, repaying more than A$330m to affected employees of Woolworths Supermarket and Metro for underpayments between 2013 and 2019.
Woolworths notes that further detailed review and modelling are necessary to determine the full financial impact, with an update expected by February 2026.
Law company Gerard Malouf & Partners launched class action proceedings against Coles and Woolworths in November 2024 related to accusations from the country’s regulator, the Australian Competition and Consumer Commission.
