Coles, Woolies underpayment matter sent back to square one

The Federal Court delivered a scathing judgment in the underpayment proceedings brought against Coles and Woolworths, having found there was a lack of factual foundation to support specific findings.

Coles and Woolworths employees who alleged they were underpaid expected to learn whether they would be entitled to compensation on Friday (5 September) morning – instead, the Federal Court sent them back to a case management hearing to iron out several concerns.

Both Coles and Woolworths have already made remediation payments – $7 million and $300 million, respectively – but employees have argued for more, largely because of a disagreement on clauses within the award, contracts, and the Fair Work Act.

There were four separate proceedings that ran together on similar issues: two from the Fair Work Commission against each of the major supermarkets, and two class actions filed by Adero Law.

In Friday’s judgment, Justice Nye Perram was unable to deal with a large majority of the issues in dispute across all four proceedings due to the “insufficient linking of legal issues with factual disputes”.

The issues were divided into three categories, starting with questions of law about interpretation of the award, contracts, and the Fair Work Act. It was the “questions of mixed law and fact” and the “questions of fact only” that caused Justice Perram the biggest headache.

“One of the difficulties with this litigation is the manner in which a majority of the construction issues were posed by the parties in a context divorced from any facts,” Justice Perram said.

Justice Perram said that rather than starting with the facts of the actual dispute and then determining what the legal debates were, the parties had “essentially approached the problem the other way around”.

“Construction disputes were identified at a high level of generality, facts were an afterthought or, more often, forgotten,” he added.

The court directed the parties to identify a single employee whose work gave rise to the suggested legal issues. As it currently stands, there were 42 sample employees for Coles and 32 for Woolworths.

The tier three issues – “questions of fact only” – left Justice Perram confused as to what the parties wanted the court to determine because they “did not seem to know what they intended by the trial of these tier three issues or what practical purpose they served”.

Justice Perram also indicated there were “unique procedural challenges” in running the Fair Work Commission’s proceedings alongside “similar but not identical” class actions.

“Whilst I would not wish to [be] definitive about how litigation of this kind might be handled in the future, I am confident that they should not be handled the way these four cases were,” the judge said.

For instance, Justice Perram said there should never have been sample employees, the construction issues should have been identified in a single list, and facts should have been agreed upon about actual employees, which make the questions real.

Had that been done, the case would have “been heard much faster and judgment delivered more quickly”, particularly if the parties had defined the award and moved on to questions of quantification.

“By permitting quantification into the picture, the proceedings became unacceptably complex. This should not be done again,” Justice Perram said.

Issues with plaintiffs for Fair Work, class actions

Justice Perram raised a number of issues with the evidence given by both lead plaintiffs in the class actions, and evidence – or lack of – from a Woolworth’s employee identified by the commission.

On the former, Justice Perram said he was not taken to specific evidence and was unable to sufficiently advance the matter.

Cameron Baker, night replenishment team manager at Woolworths, provided time and attendance records – or “clocking matters” – for the Fair Work proceeding, but claimed those records were not accurate to his hours worked in the class action proceeding.

Woolworths pressed that Baker’s evidence should not be accepted, but Baker submitted that the Federal Court should not make any adverse credit findings because it could impact the class action’s next steps.

Justice Perram was trapped between making a credit finding in and the subsequent possibility that it would open up an argument that he prejudiced Baker’s credibility, or wait for subsequent hearings, by which time it would be years since he saw Baker give evidence.

“Having considered the matter, I have concluded that the least risky path is not to determine Baker’s credibility in this initial trial.

“No doubt, when the time comes for the issue of Baker’s credibility to be assessed, a considerable period will have by then passed. That is something which will need to be borne in mind in preparing any reasons for judgment,” Justice Perram said.

The court then turned to some of the factual allegations in the case brought by lead plaintiff Maria Pabalan against Coles.

While Justice Perram generally accepted that Pabalan endeavoured to give evidence honestly and to the best of her knowledge, there were some pressing factual inconsistencies. This included Pabalan’s claim that she worked “every public holiday” when mobile phone records indicated that “every” holiday could not have been correct.

In respect to one of the Coles stores Pabalan first worked at, Justice Perram accepted that Pabalan worked long hours, but he did not think the evidence that this was usual was entirely reliable.

The same could be said for Pabalan’s evidence on taking days off in lieu, working longer hours than those she was rostered for, and the total amount of hours she spent working from home.

Pabalan was entitled to allowance in respect of clothing and laundry.

The case: Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles Supermarket Australia Pty Ltd; Baker v Woolworths Group Limited; Pabalan v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092