Australia’s largest supermarket chain, Woolworths Group, is facing a new class action after proceedings were filed in the Federal Court of Australia, alleging potential underpayment of staff in South Australia.
Woolworths confirmed on Monday that the case has been initiated by Shine Lawyers and involves a subsidiary of the group. The claim centres on alleged breaches linked to a now-repealed South Australian state law that previously classified Sundays as public holidays, potentially affecting penalty rate calculations for team members.
The company said it would strongly defend the proceedings and does not consider the matter to be market-sensitive. Woolworths also noted that the legal argument relies on legislation that has since been removed, suggesting the claims may face significant legal scrutiny.
This latest filing follows an earlier class action brought by Dutton Law, adding to the retailer’s growing legal challenges related to historical payroll practices. Woolworths has already flagged a potential post-tax charge of between A$180 million and A$330 million, following a preliminary assessment of past underpayment issues linked to court rulings.
Australia’s Fair Work Ombudsman (FWO) has also pursued legal action against Woolworths and rival Coles in recent years, alleging systemic underpayments across multiple employee groups. These cases have intensified regulatory and public focus on wage compliance across the retail sector, particularly in relation to award interpretation and payroll accuracy.
Market reaction was swift, with Woolworths shares falling as much as 2.5% to A$28.83, their lowest level since late November, during Monday’s trading session.
For HR leaders and employers, the case underscores the continued risks associated with legacy payroll systems, historical award interpretations, and jurisdiction-specific employment laws. As wage compliance remains firmly in the regulatory spotlight, large employers are increasingly being forced to reassess governance, auditing processes, and accountability frameworks to avoid prolonged legal and reputational fallout.