Target wage shame

Another major retailer owns up to underpaying staff

TARGET has joined the list of major retailers that have confessed to underpaying staff, just a day after former sister chain Coles said it too had short-changed workers.

The latest confession from a major retail chain was made as the law firm that has hit Woolworths with a $620 million class action over underpaying workers said it was considering launching a case against Coles.

Wesfarmers, which owns Target, yesterday said it had uncovered combined total of $24 million in “payroll errors”.

It came as Wesfarmers posted a 5.7 per cent jump to $1.21 billion in first-half profit yesterday, buoyed by the performance of Bunnings, Kmart and Officeworks but weighed down by a sales slide at Target.

Wesfarmers said it was setting aside $9 million for “payroll remediation” at Target, but has not revealed how many staff were affected.

In November, Wesfarmers announced it would fork out $6.1 million to compensate more than 40,000 current and former Bunnings employees who had not received their full superannuation entitlements.

The conglomerate has also put aside $15 million, as previously flagged, to compensate workers who were paid too little in its industrial and safety division.

CEO Rob Scott yesterday said monitoring and payment processes had been strengthened and the underpayments had impacted only a tiny fraction of its total workforce.

However, he said he could not rule out future underpayments, as “people make mistakes”.

Coles, which was spun out of Wesfarmers in 2018, on Tuesday said it was expecting a $20 million hit after about 600 managers at its supermarkets and liquor divisions were underpaid.

Factoring in the impact of new leasing standards and discontinued operations, Wesfarmers’ statutory net profit dropped to $1.21 billion from $4.54 billion a year ago when the company’s coffers were flush after the demerger with Coles and divestment of Bengalla.

Wesfarmers cut its interim dividend to 75c, down from $1 a year ago, when a $1 special dividend was paid. Wesfarmers total revenue for the first half rose 6 per cent to $15.25 billion.

Its shares rose 2.89 per cent to $46.55 yesterday.