October 1, 2019 / 7:00 AM / 5 months ago

Australia's Wesfarmers says 6,000 staff were underpaid $10 million

(Reuters) - Australian retail conglomerate Wesfarmers Ltd (WES.AX) said on Tuesday that about 6,000 current and former employees at its industrials and safety business were underpaid about A$15 million ($10 million) since 2010.

Wesfarmers said during the testing of its new payroll system, it found that employees at Blackwoods, Workwear Group, Coregas and Greencap units were not paid the owed sum, about half of which “relates to superannuation on loadings and allowances”.

The company said it was working to compensate the 2,000 current and 4,000 former employees impacted, with interest, adding that the errors were “inadvertent”.

“Our priority is to back pay all affected team members as quickly as possible, including interest, to ensure affected team members are fully compensated,” David Baxby, managing director of the industrials and safety business, said in a statement.

Wesfarmers also said it hired PwC to identify those affected after the errors were found and that the business is now “investing heavily” in its payroll system.

The total unpaid value was less than 1% of the business’s total payroll for the period and employees outside Australia were not affected, Wesfarmers said.

It also reported the underpayment to the Fair Work Ombudsman.

Last week, Wesfarmers’ hardware unit, Bunnings, said it faced a payroll system issue from 2011 that relates to superannuation payments.

The error affected part-time staff who worked more than their contracted hours in the 2011/2012 financial year. Bunnings said it will pay back the amounts and compensate those affected in accordance with Australian Tax Office requirements.

A Wesfarmers spokeswoman told Reuters the underpayment issue at Bunnings and the industrials and safety business were unrelated as each unit had its own separately payroll system.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Muralikumar Anantharaman

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