The Australian Retailers Association (ARA) acknowledges the decision of the Federal Court of Australia regarding historical underpayment of salaried workers under the General Retail Industry Award (GRIA).
“This case demonstrates the challenges businesses across the retail sector face in complying with the profoundly complex General Retail Industry Award,” said ARA CEO Chris Rodwell. “It highlights just how compelling the case for award simplification is. Both employees and employers should be better able to understand the award to avoid compliance issues.
“With 994 different pay rates across almost 100 pages, the GRIA is incredibly difficult for employers to understand. It is clearly not fit-for-purpose for larger employers. The expectation that smaller mum-and-dad operated businesses, who lack legal and HR resources, can use the award appropriately is entirely unreasonable.
“This complexity has been the driver for our case in the Fair Work Commission to clarify, simplify and modernise the GRIA,” he said.
“If it requires teams of lawyers and HR experts to interpret the GRIA on issues such as when overtime is payable, it’s clear the system is broken, and it is setting up businesses to fail.
“It’s important to stress this isn’t simply about retailers. Employees deserve clarity, too. Workers have the right to understand their pay and conditions clearly and simply.
“The ARA and NRA will continue to advocate for solutions that will make the retail award easy to understand while delivering choice and flexibility to employees,” said Mr Rodwell.
“The outcome of today’s judgement will have significant implications for many employers navigating complex industrial awards, particularly as it relates to salaried arrangements, including but not exclusively within the retail sector,” said Mr Rodwell.
The ARA was not a party to the FWO case.
Statement from Coles Group
In February 2020, Coles Group Limited announced it was conducting a review into the pay arrangements for all team members who received a salary and were covered by the General Retail Industry Award 2010 (GRIA). Coles sincerely apologised to affected team members and conducted a remediation program. To date, Coles has paid $31 million of remediation costs. As at 29 June 2025, Coles has a provision of $19 million reflected in its financial statements.
A class action was instituted in May 2020 and the Fair Work Ombudsman (FWO) commenced proceedings in December 2021 relating to the alleged underpayment of salaried managers in Coles’ supermarkets and the interpretation of the GRIA and the Fair Work Act.
Coles said in a statement: “We note speculation in the media regarding the financial impact of the decision of the Federal Court of Australia on 5 September 2025 in these proceedings.
“As disclosed in Coles’ release on 5 September 2025, we are progressing work to understand and quantify the potential implications of the decision for our business. As previously stated, the judgment in the proceedings is complex. A number of issues regarding the interpretation of the GRIA remain outstanding and will require further court hearings to determine.”
Coles cautions the market from relying on speculative estimates which may not have adequate regard to the application of the decision to Coles’ specific circumstances.
“Coles’ preliminary estimate is that further remediation of between $150m and $250m may be required to reflect the findings of the Court, including interest and on-costs. The range has been calculated based on the underpayments alleged by the FWO relating to historical work patterns, adjusted and extrapolated for the period for which Coles has committed to remediation and the broader population of affected salaried team members covered by the GRIA across Coles’ supermarkets business. It also reflects a potential adjustment for the period since Coles’ initial remediation process was conducted.
This estimate does not reflect any potential penalties, or costs associated with the class action to the extent it differs from the FWO proceeding noting there is significant overlap between the two proceedings.”
The potential also exists for parties to exercise appeal rights. Coles will provide further updates as appropriate.
Statement from Woolworths Group
Woolworths Group has conducted a preliminary review of the Federal Court of Australia’s decision, received on Friday 5 September 2025, relating to historical underpayments of award-covered salaried store team leaders.
Woolworths said in a statement: “The judgment is lengthy and complex and does not determine all issues in the proceedings. A case management conference has been listed for 27 October 2025 to consider the further conduct of the proceedings with many issues still to be determined. No other substantive orders have been made. It is too early to consider any appeal of any aspects of the decision. This decision will require significant and widespread changes to accepted retail practice for Woolworths Group and Australian businesses, large and small. The Group has already undertaken an extensive remediation for its affected salaried store leaders, drawing on team member records and contractual arrangements, expert external guidance and industry standard approaches to construction of the award.
“On the basis of the preliminary review of the Court’s reasons published on Friday, Woolworths Group estimates that the one-off additional impact of the Court’s findings, in relation to its potential liability for further remediation to salaried store team leaders is expected to be in the range of $180 to $330 million post tax ($250 to $470 million pre tax). Once the final remediation obligation is determined, interest, superannuation and payroll tax could add another $140 to $200 million post tax ($200 to $280 million pre tax) to the net liability.
“Woolworths Group’s estimate of further potential liability includes an assessment of the impact on all salaried store team members primarily relating to the Court’s ruling on set-off provisions, minimum breaks and treatment of leave in relation to overtime. The estimate includes further remediation related to historical underpayments from 2013 to 2019 and the impact of the ruling on set-off from 2019 to 2025.
“This is a very preliminary estimate with significant uncertainty, and is based on a historical analysis of clocked time and attendance records. Further detailed review and modelling of team member records and consideration of the Court’s decision is required to determine the full financial impact.”
Absent any further material changes, an update will be provided no later than the Group’s Half Year F26 results in February.
