Woolworths’ managers are preparing underpayment claims for as much as $250,000, raising questions about whether the company’s record wage bill could increase.
The country’s largest retailer has estimated that its underpayment of salaried managers will total$200 million to $300 millionover nine years but the vast bulk of this is understood to be for penalty rates not counted in the salary as opposed to overtime.
Union and workplace experts say if Woolworths takes into account the full extent of workers’ unpaid extra hours repayments would blow out significantly.
Retail and Fast Food Workers Union secretary Josh Cullinan said 10 extra hours a week was common for night-fill managers and climbed to 20 hours or more for department managers.
“How head office assesses that is a whole new battleground that will probably come about in the latter part of the first half of next year,” Mr Cullinan said.
“I suspect if their clock data was correct that it would be hundreds and hundreds of millions [of dollars], if not more, in unpaid overtime.”
Woolworths has previously resisted backpay for extra hours on the basis that they were not required or management did not direct the employee to perform them.
‘Crazy amounts of overtime’
Former night-fill manager Cameron Baker worked in one of Woolworths’ Melbourne stores from 2014 to 2019 and said he was paid about $67,000 a year for work contracted between 10pm and 7am.
He said he initially estimated his salary had left him underpaid $30,000 but workplace consultant Joshua Findley later calculated he had missed out on $51,600.
The reason was Woolworths failed to account for penalty rates between 11pm and 7am that were paid at 150 per cent for the first three hours and double time every hour after that.
The gap increased when weekend and public holiday rates were calculated on top.
But even that amount did not factor in the extra two hours a day Mr Baker worked beyond his contracted hours.
While Mr Baker’s contract said his salary accounted for “reasonable overtime” Mr Findley said his overtime alone was worth more than $111,000 over five years.
Mr Baker argued that the overtime was necessary due to the workload of night-fill managers who are rushing to fill shelves with stock delivered by warehouses.
“You never have enough time to get things done unless you push further and do the extra hours.”
The practice of unpaid overtime was so common that other managers referred to it as giving “some love” to Woolworths.
“He’s not unique,” Mr Findley said. “I’ve spoken to guys getting underpaid $20,000 a year and they’ve been working there ten years and they do crazy amounts of overtime. These guys are going to be owed a quarter of a million dollars.”
Employers must ensure that staff on annualised salaries are paid at least equal to what they would get paid through minimum rates on the award.
While Woolworths set its salary levels to account for average rosters and reasonable overtime, it failed to reconcile the salaries with the actual hours worked.
Mr Baker said he realised his salary was too low in August last year when he saw how much more his team would be paid under the new proposed enterprise agreement, which restored the award’s full penalty rates for the first time in decades.
However, when he approached management, he said a Woolworths group manager told him “you should think about your career”.
“It was something that wasn’t taken seriously at time,” Mr Baker said.
“I think the reason was when you try to speak to your superiors they’re on a higher pay rate and there’s a lot of ego tied up with that. If you push up a night team leader’s rate to about $80,000… you start pushing into the rate for assistant store managers.”
However, Mr Baker, like some other managers, did not always clock in and off, which means that claiming his total unpaid overtime will be difficult to prove.
Mr Findley said that even without overtime, some night-fill managers were paid between $58,000 and $62,000 when they should have been entitled to between $78,000 and $82,000.
‘High rates of clocking in’
Mr Findley represented one of the first three night-fill managers to raise the salary underpayment issues with Woolworths in February.
After two months, he was able to secure $24,000 for his client, amounting to two years’ of backpay, but Woolworths refused $8,000 in claimed unpaid overtime.
Woolworths’ estimate of up to $300 millionowed is modelled on the underpayments already calculated for almost 6000 workers over the past two years.
A spokesman said the range was “a conservative view of up to 10 years and factored in all group businesses”.
“The plan to rectify shortfalls will be informed by our engagement with the Fair Work Ombudsman as they investigate the matter.”
However, he said “the data from our initial review shows we have very high rates of clocking in and out for salaried team members in our stores”.
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