Major retail group Wesfarmers has added to the humiliation of the sector’s “endemic problem” of wage theft, with target staff being ripped off by $9 million.
The Perth-based conglomerate admitted to the underpayment this morning when reporting the company’s half-year earnings.
“Payroll errors” at Wesfarmers now equates to $24 million after including the previously revealed $15 million at its industrial and safety division.
This morning’s announcement comes on the back of Coles setting aside $20 million on Tuesday to correct its own payment scandal, following a long list of other businesses across the country.
Wesfarmers said the latest round of wage theft was discovered after the group conducted extensive reviews of its pay records.
“Immediate steps are being taken to rectify identified issues, notify and repay affected team members, including interest, and ensure accuracy in the future through a robust program of auditing and monitoring,” managing director Rob Scott said in a statement.
Attorney-General Christian Porter blasted corporate Australia for the “endemic problem” and threatened to introduce new industrial relations reforms to name and shame those guilty of wage theft.
“Get your house in order,” he said yesterday.
“We’ve had large organisations that involve themselves in any number of social issues that spend an enormous amount of time, money and effort self-promoting with PR campaigns and national advertising telling us how good they are.
“Pay your people properly.”
Mr Porter implored companies to invest and redirect resources to make sure staff members are paid properly and basic workplace law is followed.
“Like most Australians, the Government has been appalled by the number of companies that have recently admitted short-changing their staff – in some cases by hundreds of millions of dollars,” he said.
“These are not unsophisticated businesses.”
The Morrison Government is due to introduce legislation in coming week to criminalise the most serious forms of worker exploitation with significant jail terms and fines, having already increased civil penalties.
“But it is clear to me that more still needs to be done to motivate companies to improve their performance, such as disqualifying directors of organisations that continue to get it wrong,” Mr Porter said.
On Tuesday, Coles chief executive Steven Cain apologised to those impacted by the scandal, which related to a small group of salaried team members given a wage below the industry reward.
“We are working at pace with a team of external experts to finalise our review,” he said in a statement.
“Once completed we will contact all affected team members, both current and former, to remediate any identified differences in full.
“Coles has implemented steps to improve our systems and processes.”
The review into Coles’ payment irregularities discovered about 5 per cent of salaried team members at the company’s supermarket and liquor division had been underpaid.
Those covered by the enterprise agreement, however, were not ripped off by the giant retailer, which accounts for about 90 per cent of its workforce.
In October, Woolworths revealed its own payments scandal involving nearly 6000 salaried team members over nine years, amounting to $300 million.
It also comes after a dismal stretch of widespread wage theft cases across retail networks, hospitality businesses and other employers.
These include Neil Perry’s Rockpool Dining Group, which owes staff at least $10 million, and fellow celebrity chef George Calombaris, who repaid workers $7.8 million.
Others include the ABC, Qantas, Commonwealth Bank, Sunglass Hut, 7-Eleven, Bunnings, and Super Retail Group.
The retail union said it instigated the audit that led to Coles making the underpayment discovery.
The Shop, Distributive and Allied Employees Association (SDA) said it approached the supermarket company and more than 100 other major retailers in November to check up on payment issues.
“While all underpayments are wrong and should never occur, especially not in a major retailer with sophisticated accounting systems, the SDA acknowledges Coles has constructively engaged the SDA in its industry-wide audit,” national secretary Gerard Dwyer said.
“The SDA also acknowledges the company’s assurances that, having identified its problems, payments will be made to affected staff (including interest) and that Coles is working with the union to finalise the issues its audit has uncovered.”