The Fallout The consequences were substantial: Backpay in the hundreds of millions of dollars was required Payroll systems had to be reconfigured to accurately calculate entitlements Public reporting highlighted governance and oversight gaps These cases revealed a critical lesson: relying solely on payroll systems and “set-it-and-forget- it” assumptions, without regular IR compliance, payroll auditing and HR oversight, exposes organisations to significant financial, legal, and reputational risk. Lesson for Employers: Salaries may seem simple, but without specialist support, they can create hidden liabilities if hours,
predictable. But they can hide underpayments when the assumptions behind them are wrong. Even large employers aren’t immune. In high-profile Federal Court cases, Woolworths and Coles, Australia’s two largest supermarket chains, were found to have systematically underpaid thousands of salaried employees under the General Retail Industry Award. How It Happened Both organisations relied on salaries for store managers and other salaried staff, assuming these salaries would cover ordinary hours, overtime, penalty rates, public holidays, allowances, and loadings. In practice, however, these assumptions didn’t match actual work patterns. Managers frequently worked late nights, early mornings, weekends, and public holidays, hours that were not properly included in their salary. A key factor was poor record- keeping. Timesheets and hours worked were not consistently documented, making underpayments invisible until regulatory intervention.
overtime, or penalty rates aren’t actively monitored.
Even Australia’s largest employers have learned the hard way. Without robust oversight, what seems like convenience can quickly become a costly compliance disaster.
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ISSUE 20 GLOBAL PAYROLL MAGAZINE
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