Woolworths fined $1.263 million for underpaying $1 million in long service leave

The prosecution was the result of an investigation by Wage Inspectorate Victoria, which enforces the state’s long service leave laws.

Woolworths Group was fined $1,227,000 after pleading guilty to failing to pay more than $960,000 in long service leave entitlements to 1,191 former employees between 1 November 2018 and 29 January 2023. 

Woolstar Pty. Limited was fined $36,000 after pleading guilty to failing to pay more than $45,000 in long service leave entitlements to 36 former employees between 1 November 2018 and 18 December 2022. 

Today’s proceedings related to underpayments ranging from $250 to $12,000.

In sentencing, her Honour Magistrate Nahrain Warda said the underpayments were the result of systemic and wide-spread payroll failures by Woolworths.

Her Honour noted that as one of the largest employers in Australia, working across state jurisdictions, Woolworths should be expected to have infallible payroll systems in place.

Her Honour also noted the many negative flow-on effects underpayment of long service leave could have on the victims.

In sentencing, her Honour said the number of victims and the size of the underpayment were aggravating factors, while Woolworth’s self-reporting, guilty plea and cooperation with the Wage Inspectorate’s investigation were mitigating factors.

Had it not been for an early guilty plea her Honour would have imposed a conviction and a fine of $2.1 million on Woolworths and a fine of $80,000 on Woolstar.

Woolworths was also ordered to pay $15,000 in costs.

Today marks the second time the Wage Inspectorate has prosecuted a major supermarket for long service leave breaches. In 2021, Coles was fined $50,000 and ordered to pay $15,000 in costs for underpaying almost $700,000 in entitlements. 

Quotes attributable to Robert Hortle, Commissioner of Wage Inspectorate Victoria

“Wage Inspectorate Victoria’s investigation has made sure over $1 million is back in the pockets of hard-working Victorians, which is where it should have been from the time it was owed.” 

“Even such a gigantic dollar figure doesn’t tell the full story. Long service leave was miscalculated so staff weren’t aware of their full leave entitlement and therefore lost the opportunity to travel, to spend time with family or to recharge their batteries.”

“Underpayments were us much as $12,000 which, calculated using the minimum wage, is equivalent to over 500 hours or 67 days leave.”

“It’s disappointing that Woolworths, with its significant resources, has underpaid staff to such an extent. Victorians expect these large businesses to get this stuff right.” 

“Each of these workers had been with Woolworths for at least 7 years to qualify for long service leave, so it’s loyal, long serving staff who have been affected.”

“Today’s sentence should be a warning to businesses across the state, particularly big, well-resourced corporations – there are significant penalties for breaking long service leave laws and both the Wage Inspectorate and the court take underpayment of entitlements extremely seriously.”

Background

The Long Service Leave Act 2018 is a Victorian law that provides long service leave for employees who have worked continuously with one employer for at least 7 years. It applies to work that is full time, part time, casual, seasonal and fixed term.

After at least 7 years’ continuous employment with one employer, an employee is entitled to take their long service leave and be paid any unused long service leave entitlement on their final day of employment.

Most Victorian employees will be covered by the Act, unless they have a long service leave entitlement from another source, such as a registered agreement, award or another law.

A prosecution is the Wage Inspectorate’s most serious compliance tool and decisions to take legal action are made in line with its Compliance and Enforcement Policy.

Further information can be found at wageinspectorate.vic.gov.au.