I am not fan of Halloween, but I couldn’t help the connection with this blog and the time of the year.

However, the recent Woolworths underpayment story has highlighted how important it is to ensure that a company of any size is complying with its obligations under relevant Industrial Awards and Enterprise Agreements.  I am by no means going to lay blame at any Woolworths employee responsible for the error, as I am sure there are numerous reasons the underpayments occurred. I also sympathise with the employees who have been underpaid.  I have known many people throughout my career who live week to week and may have unknowingly struggled financially due to the short-change in their pay packet.

It goes to show how important the Human Resources department can be in a business and the consequences of errors for a company, its culture and its people.  Woolworths face a massive complicated amount of work back-paying 5,700 employees. It will be messy to say the least for its Payroll Team.  There will be obvious budgeting and financial flow-on effects with close to $300 million dollars to account for.  Trust will be significantly impacted between employees and leaders, which will have dramatic consequences for employee engagement, future enterprise agreement negotiations, and talent attraction.  The other major demon is the reputational damage to the Woolworths brand, with the Australian public likely to take a dim view of a major employer short-changing its workers.

The lesson in all of this is not to miss the detail in any employment contract, Award or Enterprise Agreement; as getting it wrong can have serious consequences.  I have had several conversations with employers who were confused as to which Awards applied to their employees, let alone which classification, and wrong calls on those elements can result in either large over or under payments.  Woolworths would have sophisticated people systems and a strong Human Resource team and even so, mistakes were still made.  Listen to your HR team and if necessary, get additional support or engage a HR professional if you don’t have a dedicated resource.