How shelf-stackers’ pay jumped ahead of their bosses

EWIN HANNAN
OCTOBER 31, 2019

The Australian

The uncovering of the nation’s biggest underpayment scandal was not triggered by a crack team of forensic accountants but by night-fill managers at Woolworths supermarkets finding out crew members they supervised to stack shelves were getting paid more than them.

The non-union managers were employed on annualised salaries with an average pay of $73,000 but, in January, unionised junior staff became the beneficiaries of higher pay rates in a newly negotiated enterprise agreement.

Managers at three different stores, alarmed at their discovery, fired off queries to their bosses.

According to Woolworths, it was only after they investigated further that it realised it had a big problem. It had set annualised salaries at a level designed to cover ordinary hours and reasonable overtime on a typical roster.

Managers were supposed to be paid comfortably over the award rate of pay, but the annualised wage did not take into account ­entitlements such as penalty rates and allowances that kicked in when employees worked late nights and extra hours.

The company paid too much attention to what its competitors were paying, apparently making this a priority over its legal ­obligations.

Woolworths has pledged to pay back $300 million in wages after the company underpaid almost 6000 staff members over nine…

Not that it seemed keen to ­declare its hand with the workplace regulator, already contending with a string of large companies self-disclosing massive underpayments of workers. Fair Work Ombudsman Sandra Parker said the only inkling she had of the scandal before Wednesday was when lawyers from legal firm Ashurst, representing Woolworths, told her agency in August that the ­company had ­issues with noncompliance.

Given what we know now, that was some understatement.

Parker is furious at Woolworths’ conduct, accusing it of an unacceptable lack of ­transparency.

She says the behaviour is emblematic of companies caring only about the interests of shareholders and making staff their “least priority”.

It’s hard to disagree. The level of publicly declared wage theft has now soared above $500m and the ombudsman is struggling with the workload caused by large employers trying to avoid prosecution by belatedly putting their hand up to admit they have not met their basic obligations to their workers.

It is not good enough for business groups to try to run interference for big corporates by complaining about the supposed complexity of the award system. The Fair Work Commission has spent years simplifying awards and reducing their number from more than 3000 to just 122.

If major companies can get their heads around how to minimise tax obligations and ensure directors meet requirements to get significant bonuses, paying workers legal entitlements is the least to be expected. The community, quite rightly, is fed up.