Why This is Not Woolies Calombaris Moment

Earlier this year when restaurants owned by celebrity chef George Calombaris were found to have underpaid worker wages to the extent of $7.8 million, he was held personally responsible for this failure while he could have argued that he was neither an accountant nor directly responsible for supervising wage calculations. He paid a penalty of $200,000, lost reputation, apologised, shed tears on TV interviews and he could no more be the face of Masterchef, losing millions of dollars in potential income from celebrity contracts and sponsorships.

Now we find that Woolies underpaid its 5,700 workers an amount estimated to be between $200-300 million. The scale of this is much larger in comparison to the Calombaris underpayment, affecting a significantly large number of workers. Unlike Calombaris, the $57 billion revenue Woolies has access to potentially the best software tools, the best managers and advisors to oversee its human resource and wage functions, and yet they didn’t (want to) get it right.

By the time I write this, there is a profuse apology from CEO Banducci but no likelihood of sobbing interviews, no investor backlash - the stock (ASX:WOW) has moved down just 30 cents or about a per cent from the previous close, no customers turning Woolies down in favour of Coles, no major heads rolling, and potentially no senior management members losing a few million in bonus.

All Woolies’ underpaid workers could hope for is that the company’s ‘contrition payment’ will not be as low as what Calombaris was charged, which was nearly 2.5% of the amount of underpayment. Only last week Sandra Parker, the Fair Work Ombudsman conceded that Calombaris was not charged a high enough fine and that higher fines for similar underpayment cases would be issued in future.