Coles Underpaid Store Managers $20 Million

Marco Green
February 19, 2020

Once the sale is completed, Wesfarmers will still hold a 10.1 per cent stake in Coles and retain the right to nominate a director to the supermarket group's board.

"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.

Target has set aside a $9 million provision to cover remediation.

The supermarket giant noted the "significant impact" the bushfire crisis had on the business, its suppliers, staff and the communities it serves.

Supermarket behemoth Coles has this morning announced it managed to underpay scores of its store managers in a wage theft scandal that runs to a fairly staggering $20 million.

The review has so far revealed about 5% of salaried managers at the company's supermarkets and liquor division had been affected, with the expected hit including $15m payments and $5m in interest and costs.

Coles said about one percent of its total team members had been underpaid, citing differences between employees' remunerations and the General Retail Industry Award (GRIA).

Coles said its review did not relate to team members covered by enterprise agreements, who comprise 90% of its workforce.

Additionally, around 5 per cent of salaried managers in its supermarkets were also underpaid, although that particular review is still underway.

In a statement, Coles Chief Executive Steve Cain said "we are working at pace with a team of external experts to finalise our review".

Coles surprised the market earlier this month flagged earnings guidance of between $710 million and $730 million for the six months to 5 January, easily beating the $660 million to $690 million that had been expected.

"Coles has implemented steps to improve our systems and processes".

In a separate announcement coinciding with today's results release, Wesfarmers said that it had executed trades to sell off a further 4.9 per cent of Coles Group shares.

Any former salaried members can contact Coles on 1800 061 562.

Coles has posted its half-year earnings.

In its half-year results, Coles reported retail earnings of $725 million, but $20 million will now be set aside to remediate the underpayment issue which reportedly took place in its supermarket and liquor divisions.

Retail revenue rose 3.3 per cent to $18.8 billion but statutory revenue decreased 5.7 per cent to $19 billion, driven largely by the New Alliance Agreement in its Express division, under which commission income rather than gross fuel sales revenue has been recognised from March 2019.

Sales growth at Coles' supermarkets came in at 3.6 per cent.

Maiden interim dividend of 30 cents, fully franked.

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