Beyond hopeless: Porter slams Woolworths’ $300m underpayment

@EwinHannan

OCTOBER 31, 2019

The Australian

Attorney-General Christian Porter has declared Woolworths’ record $300 million underpayment of employees as “beyond hopeless”, backing criticism the company’s conduct was emblematic of employers caring only about the interests of shareholders and making staff their least priority.

Mr Porter, who is also the Industrial Relations Minister, warned employers had “rocks in their heads” if they were not focused on wage compliance given the government was devising legislation to criminalise “large, repetitive, knowing underpayments of wages”.

Mr Porter said he received a briefing from a senior Woolworths executive on Wednesday, who confirmed the uncovering of the biggest underpayment on record was triggered by night-fill managers at the company’s supermarkets finding out crew members they supervised to stack shelves were getting paid more than them.

“They are completely acknowledging that they have made a very, very serious error,” he told 6PR’s Gareth Parker in Perth on Thursday.

“The error has to do with managers at their stores who are, obviously, permanent salaried staff, so it’s not an issue that arose with casual staff or anything of that nature, which makes it possibly even more serious.

“These are permanent senior staff at their stores and they explained that at every store, they’ll have five or six managers who will manage different components of the store, whether that’s managing what happens at night or managing a section of the store. And they, through their HR department and management made an error. That error has persisted for many years, perhaps a decade. And of course in a business the size of Woolworths, when that error gets repeated across in excess of 5500 staff, and that error persists over a decade, you have this enormous amount of underpayment that’s occurred”.

He said he was not defending Woolworths’ conduct.

“It is beyond hopeless,” he said. “I mean, it’s not just Woolworths. I mean, the scale and size of their business means that this is a very, very large amount. But you’ve had the ABC, Maurice Blackburn, Qantas, Wesfarmers. I mean, Wesfarmers and Bunnings is not an unsophisticated business.

“There just needs to be more care, more scrutiny, better systems in place, not merely to uncover previous underpayments but to make sure that this just doesn’t happen going into the future.

“And I think if large organisations with sophisticated HR systems aren’t now focusing all of their energy and effort on this and not on any other things, then they have got rocks in their head because they’ve got a major problem clearly and they have to sort it out and sort through it and … the Government is, as you know, now going through the process of devising a way to criminalise in the appropriate circumstances large, repetitive knowing underpayments of wages. And so, everyone is on notice.

In an interview with The Australian on Wednesday, Fair Work Ombudsman Sandra Parker attacked Woolworths for a completely unacceptable lack of transparency and accused major employers of putting the interests of shareholders above those of their workers.

Mr Porter backed her comments.

“Good on her,” he said. “She’s doing great work. She’s doing the investigation into Woolworths that will now go into full swing and I wish her all the best with that. I won’t comment on that investigation. But I have absolutely no reason to diverge from any single one of her comments. Like, it’s just not good enough.”

He said it was “way past time, that major organisations start auditing, start putting systems in place to make sure it doesn’t happen again; start spending money, time and effort to put systems in place to work out whether or not they have actually underpaid staff. And ultimately, at the end of the day we want money to go back to the staff.”

Asked what’s the consequence, he said: “Well, the consequence is that they go through an investigation by the Fair Work Ombudsman. There are very serious penalties … … monetary, civil penalties that apply if they do it in a fashion which isn’t criminal. And the Commonwealth Government is designing a criminal penalty for people who do it with a reckless level of knowledge.”