Underpayment update: FWO is taking action

The Fair Work Ombudsman (FWO) is taking court action against Woolworths, questioning its method of remediation of certain salaried employees. Woolworths self-reported an underpayment of employees in 2019 vis a vis the General Retail Award. The FWO questions Woolworths’ underpayment calculation method, which is the result of its interpretation of key clauses in the award.

This recent example shows that the FWO is increasing its vigilance while the complexity of the industrial award landscape in Australia continues to challenge even large employers with highly adept HR teams and sophisticated systems.

Given the breadth of the application of the General Retail Award across the Australian workforce, the result of these proceedings could reverberate across the whole retail industry.

Nimbus CEO, Grant Custance, says; “At Nimbus, we work closely with hundreds of retail organisations to help them avoid this kind of situation. It may surprise readers to know that we estimate only approximately 15 per cent of Australian retailers have the sophisticated time and attendance technology platforms in place to ensure they don’t fall foul of any Fair Work investigation. Too many organisations continue to rely on outdated, sometimes manual workforce management systems. And some who do use WFM software are relying on US based, off the shelf software, which isn’t suited to the extraordinarily complex Australian workplace awards system. The current outbreak of COVID-19 across our cities is only likely to make this problem worse – working from home workers still need to be paid accurately. There are no excuses.”

Woolworths said it welcomes the court action as an opportunity to seek clarity on complex legal issues. FWO Sandra Parker has indicated this action may be future par for the course stating: “Companies and their Boards are on notice that we will consider the full range of enforcement options available under the Fair Work Act, including court enforceable undertakings and litigation where appropriate”.