Coles Group may have to pay another A$150 million to A$250 million (US$131 million) to staff who were underpaid by Australia’s second-largest retailer.
That is the company’s estimate of the cost of a Federal Court decision on 5 September 2025 on proceedings launched by the Fair Work Ombudsman (FWO) on behalf of salaried managers in Coles’ supermarkets.
Coles said the preliminary estimate of the further ‘remediation’ includes interest and on-costs and a potential adjustment for the period since Coles’ initial remediation process was conducted under which it has paid the affected managers $31 million.
But it did not take account of any potential penalties or costs associated with a separate but overlapping class action.
The range is based on the underpayments alleged by the FWO relating to historical work patterns, adjusted and extrapolated for the period for which Coles has committed to remediation and the broader population of affected salaried team members covered by the General Retail Industry Award 2010 (GRIA) across its supermarkets business.
Noting media speculation regarding the financial impact of the court decision, Coles said it was progressing work to understand and quantify the potential implications of the decision.
“As previously stated, the judgment in the proceedings is complex. A number of issues regarding the interpretation of the GRIA remain outstanding and will require further court hearings to determine,” the company said in an ASX announcement.
“Coles cautions the market from relying on speculative estimates which may not have adequate regard to the application of the decision to Coles’ specific circumstances.”:
Coles announced in February 2020 that it was reviewing the pay of salaried employees covered by GRIA and has since apologised to those who were underpaid and conducted a remediation program.
At 29 June 2025, the retailer had a $19 million provision in its financial statements related to this matter.
The class action was instituted in May 2020, and the FWO commenced proceedings in December 2021.
Coles shares were trading 19 cents (0.79%) at $23.77, capitalising the company at $31.87 billion, at the time of writing.
