Coles' unpaid wages bill soars by another $25 million

Supermarket giant Coles has announced the cost of its employee underpayment review will blow out by another $25 million.

Back in 2021, after initially admitting to underpaying staff, Coles incurred $13 million in remediation costs and took a provision of $12 million, amounting to a total of $25 million.

After today's announcement, the total bill for the supermarket heavyweight's missing wages now sits at a whopping $50 million.

READ MORE: Coles accused of underpaying more than 7500 employees $115 million

In a message to shareholders, Coles "unreservedly apologised" to affected employees.

"In February 2020, Coles announced it was conducting a review into the pay arrangements for all salaried team members covered by the General Retail Industry Award (GRIA) after identifying shortfalls," Coles said today.

"Coles expressed its deep regret and apologised to affected team members.

"Subsequently, a class action and a separate proceeding by the Fair Work Ombudsman were commenced in the Federal Court in relation to the alleged underpayment of salaried managers in Coles' supermarkets and the interpretation of the GRIA and the Fair Work Act.

"Following further consideration of the issues as they have evolved, it intends to conduct a further remediation relating to the reconciliation of available records of the days and hours of work of salaried supermarket managers.

READ MORE: Wesfarmers says Target staff underpaid $9m after 'payroll errors' uncovered

"Coles apologises unreservedly to affected team members... (and) will take an additional provision of $25 million in relation to this matter."

The retailer's biggest competitor, Woolworths, has also been embroiled in a similar wages scandal, as has Wesfarmers, the parent company of Bunnings, Target and Kmart.

In 2021, it was revealed Coles' legal action primarily concerned employees who were responsible for managing a department or function within a Coles supermarket, such as bakery, customer service, delicatessen, dry goods, fresh produce, meat and night-fill.

The underpayments allegedly came as a result of Coles paying employees annual salaries that were not enough to cover their minimum lawful entitlements, given they generally performed significant amounts of overtime.

It is alleged that Coles' salaried managers were generally contracted and rostered to work 40 hours per week, but on average worked approximately one hour extra every shift between October 2017 and March 2020.

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