Woolworths (ASX:WOW) settles class action for underpaying workers

• Woolworths (WOW) settles a class action filed against it by Canberra law firm Adero Law in 2019 for underpaying workers
• The ASX 200-lister hasn’t disclosed the settlement amount but says it will make an ex-gratia payment of $2500 to affected current and former employees
• This amounts to roughly $50 million to be paid in total to cover the period between January 2010 and September 2013 — before the legal litigation period
• The company is also facing civil proceedings from the Fair Work Ombudsmen (FWO) regarding its underpayment of employees
• Today’s settlement of the class action is still subject to court approval

Supermarket giant Woolworths (WOW) has settled a class action filed against it by Canberra law firm Adero Law in 2019 for underpaying workers.

The ASX 200-lister stopped short of disclosing the final settlement amount for the class action but said in addition to the settlement, it would make a $2500 ex-gratia payment — including superannuation — to around 20,000 current and former salaried employees.

This amounts to roughly $50 million to be paid in total to cover the period between January 2010 and September 2013 — before the legal litigation period.

An ex-gratia payment typically refers to a payment made out of moral obligation as opposed to a legal requirement.

Woolworths said it would make the ex-gratia payment before Christmas.

The company is also facing civil proceedings from the Fair Work Ombudsmen (FWO) regarding its underpayment of employees.

Woolworths CEO Brad Banducci said the company is “pleased” to have settled the class action, and the settlement will ensure its approach to full remediation can be properly addressed through the FWO proceedings.

“Since we discovered this issue in 2019, we’ve made it our priority to do the right thing for our team members,” Mr Banducci said.

“We’ve worked through hundreds of millions of records as quickly as we can to ensure former and current team members have been paid what they were entitled to, plus interest and superannuation.”

He said the ex-gratia payment was based on a lack of appropriate records from between 2010 and mid-2013, meaning it was unclear exactly to what team members were entitled.

“With detailed analysis challenging in the early years, we felt an equal and broad-based payment to all potentially impacted team members was a fair and equitable way to approach remediation for this period.”

According to the company’s latest financial report, Woolworths has paid $370 million in remediation since October 2019 to salaried workers across its various business arms.

Today’s settlement of the class action is still subject to court approval.