Woolworths underpaid staff by up to $300m

Woolworths has apologised after admitting it owes 5700 staff up to $300 million in underpaid wages dating back more than nine years.

The supermarket giant said the underpayment was uncovered during a review triggered this year by the implementation of a new enterprise agreement covering its supermarkets and Metro stores.

It has analysed only two years of data but said on Wednesday morning the issue could date back to 2010, which it expects will result in a one-off remediation charge of between $200 million and $300 million in February’s first-half results.

The company said a review would be extended to all its Australian businesses, which include Big W department stores and Dan Murphy’s liquor.

“As a business we pride ourselves on putting our team first, and in this case we have let them down,” group chief executive Brad Banducci said.

“We unreservedly apologise.”

The company said interim back payments covering the data analysed so far, which will include interest, will be made before Christmas.

The announcement overshadowed the release of Woolies’ first-quarter sales growth which, driven by the success of its Lion King Ooshies and Discovery Garden checkout giveaways, comfortably beat that announced on Tuesday by fierce rival Coles.

Comparable sales at Woolworths’ supermarkets rose 6.6 per cent on the same period a year ago, easily trumping the 0.1 per cent from Coles.

Shares in Woolies were worth $37.73 before Wednesday’s open, up 28.25 per cent this calendar year.