May 15, 2020 / 11:10 AM / 22 days ago

UPDATE 1-Coles Group says to defend itself against underpayment class action

(Adds detail, context)

May 15 (Reuters) - Coles Group has been notified of a class action regarding underpayment of some of its managers and intends to defend itself against the action, Australia’s second largest grocery chain said on Friday.

In February, Coles said a review by the company had found it may have underpaid 5% of the managers in its supermarkets and liquor stores.

It set aside a provision of A$20 million ($13 million) for payments to these employees at that time.

Coles in a statement said it aimed to start remediation for current staff members in mid-2020 and for former employees “shortly after”.

The company added that it intends to defend itself against the class action which, given its commitments to deal directly with its workers, it said was without merit.

The company did not immediately respond to an email outside of business hours.

Other top Australian firms including Coles rival Woolworths Group, retail conglomerate Wesfarmers Ltd and top lender Commonwealth Bank of Australia have also faced underpayment issues.

This has prompted the federal government to pledge tougher laws that criminalise what it called “wage theft” and ban executives from being company directors if they were involved.

$1 = 1.5494 Australian dollars Reporting by Shreya Mariam Job in Bengaluru; editing by Jason Neely

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