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The findings will inspire future court cases of a similar kind, he said.
“It is clear that this union, and every union, as well as plaintiff law firms and litigation funders, will be looking. Why would they not, when they have these cases as a lesson for how to do it?”
The nation’s retail industry lobby group said it was alarmed by the implications for the broader retail sector, and said it was proof the General Retail Industry Award (GRIA) – which contains 994 pay rates over nearly 100 pages – was too complex.
“If it requires teams of lawyers and HR experts to interpret the GRIA, it’s clear the system is broken, and it is setting up businesses to fail,” Australian Retailers Association chief executive Chris Rodwell said.
“These outcomes move in the opposite direction to Australia’s recent efforts to lift productivity, creating a heavier regulatory burden for businesses already drowning in red-tape.”
Fast-food veteran Jack Cowin, executive chairman of Domino’s and founder of Hungry Jack’s, said Australia’s labour laws were much more complex and complicated “than anyplace else I’m aware of”.
Fast-food veteran Jack Cowin: “Somebody makes a mistake somewhere along the line.”Credit: Dan Peled
“Somebody makes a mistake somewhere along the line – I would expect that’s what’s happened at Woolies and Coles. Someone’s made an error,” Cowin said. “From our company point of view, we spend a fair amount of time and energy to make sure we get it right.”
Ten Cap lead portfolio manager Jun Bei Liu said analysts broadly expected the supermarket giants to appeal against the findings, which could ultimately lower the final remediation figure that the Federal Court is yet to determine.
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“All of corporate Australia, large corporates, will be very, very careful in assessing what staff costs are,” Liu said.
On Monday, Woolworths and Coles both set aside a further $780 million in combined potential back pay. Woolworths paid and set aside far more than Coles.
Woolworths, which has already paid back more than $486 million to staff, will set aside a further half a billion dollars: $180 million to $330 million in remediation (post-tax), and a further $140 million to $200 million post-tax for interest, superannuation and payroll tax.
“This decision will require significant and widespread changes to accepted retail practice for Woolworths Group and Australian businesses, large and small,” the company said in a statement.
To date, Coles has repaid $31 million with a further $50 million to be paid, but in an update on Monday, it estimated it would have to back pay an additional $250 million.
“Coles’ preliminary estimate is that further remediation of between $150 million and $250 million may be required to reflect the findings of the court, including interest and on-costs,” the supermarket stated.
The estimate doesn’t include penalties or class action costs. Coles also hinted that it may exercise its right to appeal.
“Coles cautions the market from relying on speculative estimates which may not have adequate regard to the application of the decision to Coles’ specific circumstances.”
A case management hearing will be heard on October 27, which may provide further determinations.
Last week’s Federal Court judgment brought together four separate proceedings launched by class action law firm Adero Law and the Fair Work Ombudsman against the two supermarkets in 2019 and 2020.
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