This archive report was first published on 23 June 2020.
Published on June 23, 2020, Woolworths Group Ltd has revealed that it underpaid employees at its pub and hotels group ALH Hotels, exacerbating a wage scandal that has impacted several of Australia's largest companies.
The grocery giant had previously admitted to historically underpaying thousands of supermarket workers, with the total amount reaching up to A$300 million. This latest disclosure comes as several other conglomerates, including Coles and Wesfarmers, have also been embroiled in pay issues.
Woolworths now expects total remediation costs for underpayment of staff across the group, including salaried ALH staff who were underpaid in 2018 and 2019, to be approximately A$390 million. This is expected to impact the company's full-year operating profit forecast, which is predicted to be between A$3.20 billion and A$3.25 billion, marginally lower than the previous year.
Chief Executive Brad Banducci stated, “The group remains committed to fully rectifying any payment shortfalls across all group businesses as quickly as possible.”
Woolworths also plans to incur costs of up to A$176 million to streamline its supply chain by building two new distribution centres and a further A$230 million related to the planned combination and spin-off of its drinks and pubs units. The operating profit at its hotels unit is expected to decrease significantly, from between A$320 million and A$330 million to between A$160 million and A$170 million, due to restrictions imposed to curb the spread of the coronavirus outbreak.
