Woolworths owes workers $300m in underpayments and it may just be the tip of the iceberg.

The AGE reports:Supermarket giant and one of Australia’s largest employers Woolworths has revealed it underpaid nearly 6000 of its employees as much as $300 million due to non-compliance with the industry award across its supermarkets and Metro stores.

The “discrepancy” was found during a review of its workers’ salaries prior to implementing the company’s newest enterprise bargaining agreement.

Salaried workers at the company’s other divisions, including Big W, Dan Murphy’s and BWS, may also be affected. A total of 19,000 salaried workers are employed by Woolworths, and the company said former workers may also be eligible for underpayment.

If this is the case, the additional cost could be just under $1 billion.

How did this come about? The situation may have been going on for nearly a decade

Why were staff not better informed of their entitlements by their union and by their employer.

As appears to be the case with a number of high-profile restaurants, Woolworths is not arguing about whether this dubious practice has been going on. Systematic underpayment appears to be part of the business model.

The repayment of the wages should include an interest component and the government should be legislating penalties for what can only be branded as wage theft.

This form of behaviour is inexcusable on two counts.

Firstly, it steals from the workers who have been denied wage increases for an exceptionally long period of time and this form of behaviour coupled with slow wage growth damages the economy.

Secondly, there will be a negative response from the stock market and Woolworths’ shares will lose value. This will have negative effect on shareholders and all the superannuation funds who have invested in Woolworths shares.

It wasn’t long ago that penalty rates were cut in the retail and hospitality industries. Now we find that these two industries appear to be underpaying workers by millions of dollars having pleaded to the commission couldn’t afford to pay workers over the weekends.

This is chicanery of the highest order.

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