Woolworths is staring at an employee class action following revelations it underpaid thousands of its employees.
The action alleges the supermarket giant’s underpayment scandal is far worse than the current $300 million estimate.
Woolworths on Monday said it would “fully defend” itself against the legal proceedings headed by Adero Law, which accuse Woolworths of substantially underestimating the scale of the underpayment bill.
Woolworths in October admitted to a near decades’ worth of underpayment of nearly 6000 employees, and said it discovered it had been keeping the cash only when shocked store managers complained they were earning less than their staff.
The company has committed to repaying all underpaid staff and chief executive Brad Banducci has given up a potential $2.6 million bonus as a show of contrition.
The company said last month that returning the cash plus interest to staff will result in a one-off remediation charge of between $200 million and $300 million in February’s first-half results. However, the final numbers of staff affected and wages underpaid could climb.
The company has so far reviewed two years’ worth of data back to September 2017.
But Adero believes Woolworths’ underpayment bill could be as much as $620 million.
“Adero is instructed that current and former Woolworths employees have suffered underpayments and systemic wage theft during their employment at Woolworths on a far greater scale than the retail giant has disclosed,” the firm said in a statement.
-with AAP
