Australia’s largest supermarket operator, Woolworths Group Ltd., is facing a new Woolworths class action after legal proceedings were filed in Federal Court alleging potential underpayments to staff in South Australia.
The case, brought by Shine Lawyers, adds to a growing list of legal and regulatory challenges confronting the grocery giant over historical payroll practices.
Woolworths said Monday that the proceedings involved a subsidiary and were based on a South Australian state law that had been repealed years ago. The company said it would defend the claims and did not consider the matter to be market sensitive.
The Woolworths class action centers on claims that certain team members were underpaid due to the interpretation of a now repealed state law that once classified Sundays as public holidays in South Australia.
Shine Lawyers alleged that this interpretation may have resulted in staff receiving less than their lawful entitlements over an extended period.
Woolworths said the claims overlapped with issues raised in an earlier proceeding filed by Dutton Law, which also targeted alleged staff underpayments.
The company has been reviewing historical payroll records across parts of its operations following a series of court decisions that reshaped how penalty rates and entitlements were calculated.
In a statement, Woolworths said it believed the legal arguments relied on outdated legislation and said it would contest the proceedings.
Employment law specialists said the case highlighted the ongoing complexity of Australia’s industrial relations framework.
“Even when laws are repealed, disputes can arise around how they were applied historically,” said Mark Ellison, a Sydney based workplace relations expert.
“The Woolworths class action reflects how legacy payroll systems can leave large employers exposed years later.”
Ellison said courts would likely focus on whether Woolworths had reasonably interpreted the law at the time and whether employees suffered quantifiable losses.
Corporate governance analyst Fiona Barrett said repeated wage disputes posed reputational risks for major retailers. “Investors tend to view these cases as indicators of compliance culture, even when companies dispute the claims,” Barrett said.
Woolworths has previously disclosed it could face between A$180 million and A$330 million in post tax charges following a preliminary review of historical staff underpayments linked to earlier court rulings.
Those figures do not include potential costs tied specifically to the latest Woolworths class action. The Fair Work Ombudsman has separately launched proceedings against both Woolworths and rival Coles Group Ltd., alleging systemic underpayment of workers across multiple years.
Together, the two retailers dominate Australia’s grocery sector by market value and store footprint. Shares of Woolworths fell as much as two point five percent to A$28.83, their lowest level since late November, following news of the latest legal filing.
Current and former employees expressed mixed reactions to the legal action. “I worked Sundays for years and always wondered if the rates were right,” said Daniel Price, a former Woolworths employee in Adelaide.
“If there was a mistake, people deserve clarity.” Retail Workers Union representative Laura Nguyen said the case underscored the importance of transparency.
“Workers rely on large employers to get pay right the first time,” Nguyen said. “Legal action becomes a last resort when questions go unanswered.” Shine Lawyers did not respond to a request for comment.
Legal observers said the Woolworths class action could take years to resolve, particularly if it proceeds alongside existing litigation. Outcomes may hinge on technical interpretations of industrial awards and state legislation no longer in force.
Woolworths said it continued to invest in payroll systems and compliance reviews to prevent future issues. Regulators are expected to maintain close scrutiny of large employers as wage theft remains a high profile issue nationwide.
The latest Woolworths class action adds another layer to ongoing legal scrutiny of Australia’s largest grocer, as courts and regulators examine how historical wage laws were applied.
While Woolworths disputes the claims and points to repealed legislation, the case reflects broader challenges facing major employers navigating complex industrial relations frameworks.
The proceedings are set to unfold amid continued regulatory attention and investor focus on workplace compliance.
