Coles reveals $20 million bill for underpaying staff

The supermarket giant launched an investigation after similar underpayments were revealed at its rival Woolworths as well as Bunnings, the Super Retail Group and iconic restaurant chains.

It released a statement this morning as it handed down its half-year profit results which said it will set aside $20 million to cover the payment discrepancies from a six-year period.

RELATED: Woolworths underpays staff $300 million over nine years

RELATED: George Calombaris’ wage theft scandal is tip of the iceberg

Coles chief executive Steven Cain apologised to those impacted by the scandal, which related to a small group of salaried team members given a wage below the industry reward.

“We are working at pace with a team of external experts to finalise our review,” he said in a statement.

“Once completed we will contact all affected team members, both current and former, to remediate any identified differences in full.

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

Coles chief Steven Cain apologised for the impacted staff members. Picture: Andrew HenshawSource:News Corp Australia

The review into the payment irregularities discovered about 5 per cent of salaried team members at the company’s supermarket and liquor division had been underpaid.

Those covered by the enterprise agreement, however, were not ripped off by the giant retailer, which accounts for about 90 per cent of its workforce.

In October, Woolworths revealed its own payments scandal involving nearly 6000 salaried team members over nine years, amounting to $300 million.

It also comes after a dismal stretch of widespread wage theft cases across a number of retail networks and hospitality businesses.

These include Neil Perry’s Rockpool Dining Group, which owes staff at least $10 million, and fellow celebrity chef George Calombaris, who repaid workers $7.8 million

The revelation comes as the company reported retail earnings of $725 million, confirming its earlier predictions a strong Christmas period underpinned a vastly improved second-quarter performance.

Sales growth in its key local supermarket division rose to 3.6 per cent, lifting second-half comparative sales growth to 2.0 per cent after a dismal first quarter.

Coles surprised the market earlier this month when it flagged earnings guidance of between $710 million and $730 million for the six months to January 5, easily beating the $660 million to $690 million that had been expected.

The company’s liquor division remains under pressure, however, as a result of range reviews and discounting activity.

Mr Cain said the summer’s bushfires have also had an impact on liquor volumes and a review of operations and an update would be provided at the full-year results announcement.

Coles’ 0.4 per cent jump in first-half retail earnings does not account for a number of non-repeating items, including new lease provisions, fuel sales agreements and the cycling out of discontinued operations such as Kmart, Target and Officeworks following the 2018 demerger from Wesfarmers. As such, net profit for the period was down 33.7 per cent to $498 million on a statutory basis.

— with AAP’s Alex Druce



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