The class action against Woolworths Group over the underpayment of salaried store managers has been extended in scope, with the claim period now running through to September 2020 following a Federal Court hearing on 20 March.
The case, Baker & Anor v Woolworths Group Limited & Anor, is being run by Adero Law alongside a parallel proceeding by the Fair Work Ombudsman (FWO). At the March hearing before Justice Nye Perram, Woolworths consented to an amended application that extends coverage for group members employed between November 2013 and November 2019, and for employees of Woolworths SA and Big W employed between June 2014 and June 2020, with underpayments now claimed through to September 2020. Adero Law estimates the extension could add millions of dollars in total unpaid entitlements to the action.
The class action covers approximately 40,000 current and former Woolworths and Coles salaried managers combined. The central finding of the September 2025 Federal Court judgment was that Woolworths and Coles had failed to ensure managers’ annual salaries covered their full award entitlements within each individual pay period, including overtime, penalty rates, and allowances under the General Retail Industry Award 2010. The court also found both retailers had failed to keep adequate records of overtime hours, which under the Fair Work Act shifted the burden of proof to the employers to disprove the underpayment claims.
Woolworths has already made remediation payments exceeding $300 million, and Coles more than $7 million, but the FWO and class action applicants have argued more is owed. Legal analysts have estimated the combined exposure for both retailers could approach $1 billion, with Woolworths facing an additional $500 million and Coles $250 million in potential underpayments as a result of the judgment.
At the March hearing, the court also directed parties to produce final declarations, formal statements reflecting the court’s findings in the September 2025 judgment, by early April. Once those declarations are made, both sides will have the opportunity to appeal and cross-appeal. Woolworths has also agreed to provide employee records it supplied to the FWO to the class action. Adero Law has flagged it intends to press for full disclosure of all employee records relevant to the action.
A further case management hearing is scheduled for 1 May 2026. An appeal by Woolworths and Coles against the September 2025 judgment is widely anticipated given the financial implications of the ruling for both retailers.
The case has broader implications for the food and grocery sector. The Federal Court’s ruling confirmed that employers cannot use an ‘all-in’ annualised salary to offset underpayments in one pay period against overpayments in another, and that record-keeping obligations apply even where employees are paid fixed annual salaries. Businesses across food manufacturing and retail that use similar annualised salary arrangements for award-covered staff have been put on notice to review their payroll practices.
