The Federal Court of Australia’s judgment against Woolworths Group and Coles Group could have wider implications across the retail industry, according to the Australian Retailers Association (ARA).
Last week, both supermarket giants reported to have backpaid millions of dollars in underpayments, with Woolworths reporting around $330 million, while Coles claimed to have made $31 million in remediation costs.
As of June 29, 2025, Coles had a provision of $19 million reflected in its financial statements.
Both entities separately noted that the judgment in the proceedings is complex, with Coles adding that a number of issues regarding the interpretation of the General Retail Industry Award (GRIA) remain outstanding and will require further court hearings to determine.
Woolworths added that a case management conference has been listed for October 27 this year to consider the further conduct of the proceedings, with many issues still to be determined. “No other substantive orders have been made,” Woolworths noted in a statement. “It is too early to consider any appeal of any aspects of the decision.”
Woolworths estimated 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.”
In a fresh statement today, the ARA reported the judgment regarding historical underpayment of salaried workers under the GRIA is likely to increase the cost and compliance burden on retail businesses of all sizes, undermine productivity outcomes and curtail career opportunities in the sector.
ARA CEO Chris Rodwell said while legal teams continue to review the complex 200-page judgment, the emerging impacts for the broader sector are alarming.
“This judgment is likely to impact the future distinction between hourly paid and senior salaried employees,” Rodwell said. “For example, salaried team members who are paid above $90,000 per year must be treated in the same way as a more junior worker who is paid hourly. This will likely push retailers of all sizes to stop preferencing salaried arrangements, which undermines secure employment and career choices for retail workers.”
The ARA’s latest vocalisation follows more than a year of back and forth with the Fair Work Commission over the GRIA, including what the ARA calls a complex pay structure. This was met with scrutiny from unions, who labelled the ARA’s lobbying as an attack on penalty rates.
Since then, the Albanese Government passed into law a Bill to protect penalty rates, with the ARA calling it “heavy-handed” legislation that is based on a premise of fiction. “There has been no effort to abolish penalty rates,” Rodwell had said. “The focus has been on giving employees a choice around their salary, allowing them to opt for a higher base salary in lieu of penalty rates, and to improve job security.”
Regarding the latest issue between Woolworths, Coles, the Fair Work Ombudsman and the Federal Court of Australia, Rodwell said the government and unions’ attempt to seek more secure work is having the opposite affect if salaried arrangements are made to be practically unworkable.
“These outcomes move in the opposite direction to Australia’s recent efforts to lift productivity, creating a heavier regulatory burden for businesses already drowning in red-tape,” Rodwell said.
“Requiring senior employees to clock on and clock off, measure breaks and be given no discretion or autonomy to decide when they need to work extra hours is not only a significant compliance burden, it further restricts flexibility in a way many will not welcome,” he said.
The ARA provided further examples of the compliance burden created by the judgment, including that senior salaries cannot be offset on an annual basis, as is allowed under many industry awards currently. The judgment determines that salaried team members need to be paid in a similar manner to waged team members, instead of allowing for the smoothing of entitlement across the year, the ARA noted.
In another example, the ARA noted that if a team member takes seven days leave and the employer rosters them back at work on the eighth day, the leave days will now be treated as worked time. “This means overtime will be payable on the eighth day (as it would be 8 consecutive days of work, which isn’t permitted under the GRIA),” the ARA noted.
Moreover, the span of ordinary hours will need to be assessed on a store-by-store basis for every retailer around the country. “This is despite the Fair Work Commission previously providing clarity that the span of ordinary hours can be determined by reference to the retailer as a whole.”
Rodwell said this case demonstrates the challenges businesses across the retail sector face in complying with the “profoundly complex” GRIA.
“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,” Rodwell said.
“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, which lack legal and HR resources, can use the award appropriately is entirely unreasonable.”
Rodwell added that this complexity has been the driver for its case for FWC to clarify, simplify and modernise the GRIA.
“If it requires teams of lawyers and HR experts to interpret the GRIA, it’s clear the system is broken, and it is setting up businesses to fail,” Rodwell said.
“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 was not a party to the FWO case against Woolworths and Coles.