Australian watchdog sues supermarket chain Coles over staff underpayments

(Reuters) - Coles Group, Australia's second-biggest grocery chain, is being sued by the country's industrial relations watchdog for underpaying staff over three years, the parties said in separate announcements on Thursday.

In a raft of allegations against one of the country's biggest employers, the Fair Work Ombudsman (FWO) said https://bit.ly/3rtR3n8 Coles underpaid 7,812 employees by A$115.2 million ($81.99 million) between January 2017 and March 2020.

Underpayments ranged from insufficient annual salaries to cover for the overtime work done by its workers and also "significantly underestimated" amounts under the company's remediation programme, among others.

More than A$108 million was the outstanding amount under the remediation programme, the FWO said, adding that the company also failed to keep proper records of employees' overtime hours.

The FWO was seeking penalties against Coles in the Federal Court for multiple alleged breach of workplace laws, with penalties of up to A$63,000 per breach.

"Businesses paying annual salaries cannot take a 'set-and-forget' approach to paying their workers," Fair Work Ombudsman Sandra Parker said on Thursday.

Coles, which has been under the watchdog radar since February 2020 when investigations on the company's pay arrangements for its salaried employees had started, said it was reviewing the proceedings.

The FWO had also sued the country's biggest grocer Woolworths Group https://reut.rs/3IcqLLZ and the largest lender Commonwealth Bank of Australia https://reut.rs/3xMUmql (CBA.AX) for staff underpayments, underlining it as a persistent issue among businesses of all sizes, across different industries.

($1 = 1.4051 Australian dollars)

(Reporting by Savyata Mishra in Bengaluru; Editing by Sherry Jacob-Phillips)