Aldi to face $150m wage theft class action suit

Discount supermarket chain Aldi is facing a class action claim over $150 million in alleged unpaid wages it “systematically” withheld from tens of thousands of workers across the country.

The claim, lodged in Federal Court on Friday by the Shop, Distributive and Allied Employees Association, accuses the retail giant of forcing employees to work up to 30 minutes before their rostered shift without pay.

“We estimate that over 20,000 workers are owed $150 million in backpay and we’re seeking proper compensation for impacted workers,” the SDA said.

The SDA, Australia’s largest private trade sector union, alleged that unpaid tasks employees carried out included till changes, cashing up the register, performing safety checks, emptying bins and checking communication devices.

“Our investigation has found that this practice isn’t limited to a few workers or a few stores, it happened everywhere in Aldi,” it said.

The class action comes after the Federal Court ruled in 2022 that Aldi underpaid distribution workers in Sydney by making them start work 15 minutes before their rostered shifts.

National secretary Gerard Dwyer said Aldi’s alleged conduct was “fundamentally unlawful and illegal”.

"Aldi has had its chance to do the right thing and backpay workers after they lost the Federal Court case in NSW,” he said.

“They’ve fumbled the bag and failed to do it right by their workforce; now they have to face the consequences of these breaches … over $100 million has been ripped out of the pockets of workers and their families by this multi-billion-dollar corporation.”

While Aldi is not obliged to disclose profit margins annually as an unlisted company, the ATO revealed in FY 2020-21 that it increased its revenue from $9.6 billion to $10.7 billion.

In April, Aldi reported that its sales in the last quarter of 2022 were up 13.2 per cent year-on-year, as consumers switched to the discounter to save money amid higher living costs.

The Aldi action comes after its biggest competitors, Woolworths and Coles, were also accused of serial underpayments in Federal Court.

The FWO sued the supermarket giants in June over setting up payment structures to avoid paying workers overtime.

Woolworths is also facing over 1,000 criminal charges in a suit brought by Wage Inspectorate Victoria for allegedly failing to pay more than $1 million in long service leave.

It has previously admitted to underpaying workers nearly $600 million over recent years, while Coles has estimated it still owed workers $50 million.

In response to widespread wage theft, the government has introduced a bill to criminalise the practice. If passed, a maximum penalty of 10 years’ imprisonment and fines of up to $7.8 million would apply to deliberate underpayments.

This article was originally featured in Accountants Daily.