Upmarket department store David Jones and the Country Road Group have emerged as the latest major retailers to have underpaid staff, with the companies owing a total of $3.7 million to more than 7000 staff members.
The parent company of the two brands, South African retail group Woolworths Holdings, announced on Friday it had undertaken an audit of its payments systems after identifying payment errors in late 2019.
The results of that audit revealed $1.35 million in underpayments at David Jones, affecting 6200 staff members and largely relating to unpaid superannuation entitlements.
Similarly, a $2.36 million unpaid wage bill was uncovered at Country Road Group, which owns retail brands Country Road, Trenery, Mimco, Witchery and Politix. This affected 1100 workers, mainly within the Politix business.
Woolworths Holdings, which is not affiliated with Australian supermarket chain Woolworths, blamed the underpayments on system errors relating to rostering and payroll systems, with interim chief executive Ian Moir apologising for the incident.
“Our team members should expect to be paid correctly. We deeply regret this has not occurred and apologise unreservedly to our team. We are now focussed on ensuring our team members are paid the money owing to them as quickly as possible,” he said.
Country Road Group’s chief executive officer Scott Fyfe said the cause of the underpayments within the group was primarily related to “poor systems integration” stemming from the 2016 acquisition of menswear company Politix.
“We’ve now completed a thorough review of systems and processes and taken the necessary steps across the group to ensure these errors cannot be repeated,” he said.
These revelations will come as a further blow to David Jones, which is in the midst of a major restructure, closing stores and selling property to reduce its massive debt pile and ensure the future viability of the once-prosperous department store.
Woolworths Holdings has notified the Fair Work Ombudsman, the Australian Taxation Office, and retail union SDA. The company also appointed KPMG to advise on the process.
Gerard Dwyer, national secretary of the SDA, welcomed the announcement, which follows demands from the union last November that all retailers conduct an audit of their payroll systems.
“All companies need to properly invest in their payroll systems to ensure there is no repeat of the long chain of underpayment announcements we have seen in the last year and a half,” he said.
The retailer is just one of many companies who have admitted to underpaying staff in recent months, with other major merchants such as Coles, Woolworths, Michael Hill, Super Retail Group, Bunnings and Target all admitting to collectively hundreds of millions in unpaid wages.
The Senate is currently undertaking an inquiry into the unlawful underpayment of employees’ remuneration, which is due to report by early December.
David Jones and Country Road Group employees have been notified of the issues, with repayments plus interest expected to be made by mid-October.
This story originally appeared in the Sydney Morning Herald. Read the original story here.