AUS
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UK
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Highlights
- Woolworths estimates additional remediation costs of AUD 320–530 million post tax.
- Coles projects further remediation between AUD 150–250 million including interest and on-costs.
- Both companies’ share prices slipped following the ruling, with Coles down 1.11% and Woolworths edging 0.07% lower.
Australia’s supermarket giants Woolworths (ASX:WOW) and Coles (ASX:COL) are bracing for hundreds of millions of dollars in additional remediation costs after a Federal Court judgment on alleged staff underpayments. The decision, handed down on 5 September 2025, relates to salaried managers at the two retailers and could affect nearly 30,000 employees.
Both companies informed the ASX about the expected financial impact, noting that the ruling would significantly reshape retail pay practices across the country.
Woolworths Flags Heavy Liabilities
Woolworths said it has conducted a preliminary review of the judgment, which concerns historical underpayments for award-covered salaried store team leaders. While the decision is complex and further proceedings are scheduled for October, the group expects substantial additional costs.
The supermarket chain projects a one-off impact of AUD 180–330 million post tax (AUD 250–470 million pre tax), with interest, superannuation, and payroll tax potentially adding another AUD 140–200 million post tax (AUD 200–280 million pre tax).
Woolworths’ estimate covers issues including set-off provisions, overtime treatment, and historical underpayments dating back to 2013. However, the company stressed the figures are preliminary and carry “significant uncertainty.”
Coles Also Warns of Significant Exposure
Coles which has already paid AUD 31 million in remediation and provisioned AUD 19 million as of June 2025, now expects a much larger bill. Following the Federal Court ruling, Coles estimates additional remediation of between AUD 150–250 million, inclusive of interest and on-costs.
The supermarket said its calculations are based on alleged historical underpayments raised by the Fair Work Ombudsman, adjusted to cover the period under review. Coles cautioned, however, that the ruling remains complex and further hearings will be needed to clarify outstanding issues.
Market Reaction
Investor sentiment turned cautious following the disclosures. On the morning of 8 September, Woolworths’ shares slipped 0.07% to AUD 27.57 per share, while Coles’ shares fell 1.11% to AUD 23.70 per share.
