Supermarket giant Woolworths has revealed another blowout in its wage theft scandal, admitting it owes $390 million to short-changed workers after uncovering more in its hotels division.
In an announcement to the ASX on Tuesday morning, the retailer said it had identified previously unrecognised payment shortfalls in salaried staff at its ALH Hotels.
Woolworths did not reveal how many staff were affected, but said they had not been paid properly under the general hospitality industry award in the 2018 and 2019 financial years.
With the inclusion of additional wage records, accrued interest on back-payments still owed and a broader review of awards across the group, Woolworths said the amount it owed current and former staff had blown out by a further $105 million.
The company’s underpayment is one of Australia’s biggest wage theft scandals and was first revealed in October 2019, when Woolworths said it owed about 5700 staff $200 million-$300 million.
In February, it admitted the shortfall had exceeded its worst estimates, blowing out to $315 million – and said it was likely to rise further. It had also been found to affect 7000 employees.
“The group continues to review the estimated payment shortfall liability, which is based on calculations involving a high degree of complexity, and which remains subject to further analysis of historical years and the completion of the review of all awards applicable across the group,” the company said on Tuesday.
Chief executive Brad Banducci said Woolworths was committed to fully rectifying any shortfalls as quickly as possible.
Also on Tuesday, the company said trading had remained strong in the June quarter, with food sales in Australia up 8.6 per cent, and in New Zealand up 15.1 per cent.
Sales at Big W jumped 27.8 per cent in the 10 weeks to June 14, while the Endeavour drinks business had 21.4 per cent growth in the same period.
By comparison, sales had grown in the low single digits during the first half in all four segments.
The retail giant said it expected full-year earnings before interest and tax to be $3.2 billion-$3.25 billion, compared to $3.29 billion for a 53-week period last year.
However, earnings for its Hotels business, which has been hit by venue closures, will be between $160 million and $170 million, down from $355 million last year.
Woolworths will report full year results on August 27.
The company also announced plans to develop an automated regional distribution centre and a semi-automated national distribution centre at Moorebank in Sydney.
The facilities will replace two other Sydney distribution centres and one in Melbourne. The company has flagged redundancies in the transition to the new facilities, setting aside $176 million to pay for them.
Woolworths said it will invest $700 million to $780 million in technology and fitting out two distribution centres in the next four years. It has signed an initial 20-year lease.
The investment is expected to deliver a significant reduction in the group’s supply chain costs over time.
It will result in a one-off pre-tax cost of $176 million in the FY20 accounts.
-with AAP
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