Woolworths Faces Fresh Class Action Over Alleged Underpayments, Shares Slide

Australia’s largest supermarket chain, Woolworths Group, has confirmed that a new class action lawsuit has been filed against the company in the Federal Court, alleging potential underpayments to employees in South Australia. The legal proceedings, lodged on Monday by Shine Lawyers, target a Woolworths subsidiary and relate to claims about incorrect wage payments under historical employment arrangements.

According to Woolworths, the allegations rely on a South Australian state law that was repealed some time ago. That former legislation classified Sundays as public holidays, a provision that the company says is no longer in effect. Woolworths stated that it does not believe the latest class action is market-sensitive and has indicated it will vigorously defend the proceedings.

This development follows an earlier underpayment case brought by another law firm, Dutton Law, highlighting ongoing legal scrutiny over employee wages within the Australian retail sector. Woolworths has already disclosed that it expects a significant financial impact from historical underpayment issues, flagging a post-tax charge estimated to range between A$180 million and A$330 million. The provision was announced after the company conducted a preliminary review of a court decision related to past payroll practices.

The issue of underpaying retail workers has drawn the attention of Australia’s Fair Work Ombudsman, the national industrial relations watchdog. The regulator has initiated proceedings against both Woolworths and rival supermarket giant Coles, alleging widespread underpayments affecting thousands of workers across multiple years. These cases have intensified debate around compliance, payroll systems, and corporate accountability in Australia’s grocery industry.

Market reaction to the latest legal news was swift. Shares in Woolworths fell as much as 2.5% to A$28.83, marking their lowest level since late November. The decline reflects investor concern about potential legal costs, compensation payments, and reputational damage as the company navigates multiple legal challenges.

Shine Lawyers did not immediately respond to requests for comment. As the proceedings move forward, the Woolworths underpayment cases are likely to remain a key issue for investors, regulators, and employees, reinforcing the importance of wage compliance across Australia’s retail sector.