Investor Presentaiton
138
Notes to the Consolidated Financial Statements
3.12
Trade and other payables
3.13
Provisions (continued)
Movements in the team member remediation provisions during the period are as follows:
Balance at start of period
2023
$M
2022
$M
Cash payments
5,621
5,216
Additional provision
1,511
1,350
Balance at end of period
491
7,623
436
7,002
END-TO-END PAYROLL REVIEW
Trade and other payables comprise amounts owing to the Group's suppliers that
have been invoiced or accrued and contract liabilities.
Trade payables
Accruals
Contract liabilities
Total trade and other payables
Assets and liabilities
3
139
Annual Report 2023
Woolworths Group
2023
2022
$M
$M
291
154
(124)
(64)
85
201
252
291
1
highlights
Performance
Significant Accounting Policies
Contract liabilities
Contract liabilities represent consideration received for performance obligations not yet satisfied
primarily relating to the Group's loyalty programs, gift cards, and the provision of data analytics
and consulting services. Substantially all of the revenue deferred as at the end of the period
will be recognised in the following period.
3.13
Provisions
The main provisions held by the Group are in relation to employee benefits,
self-insured risks, restructuring, and onerous contracts.
Current
Employee benefits
Self-insured risks
Restructuring, onerous contracts, and other
Total current provisions
Non-current
Employee benefits
Self-insured risks
Restructuring, onerous contracts, and other
Total non-current provisions
Total provisions
3.13.1
Team member remediation provisions
2023
$M
2022
$M
1,386
193
61
1,640
1,445
177
58
1,680
130
121
470
451
257
274
857
846
2,497
2,526
Included in the employee benefits provision is $252 million (2022: $291 million) relating to the team member remediation
provisions, of which $65 million (2022: $90 million) relates to salaried team members and $187 million (2022: $201 million)
relates to hourly paid team members.
During the 2021 financial period, the Group established an end-to-end review across the Group's payroll systems
and processes to test and ensure compliance with the Group's obligations under the General Retail Industry Award (GRIA)
as well as other modern awards, EAs, and statutory entitlements for both salaried and hourly paid team members across the
Group. As part of this review, certain areas of non-compliance were identified.
The Group has applied extensive resources to the review and analysis of its records, and the calculation of the likely
remediation to affected team members. Notwithstanding this, uncertainty remains in relation to the Group's exposure
as engagement with team members and the relevant regulators remains in progress.
During the period, the Group concluded its compliance testing and finalised remediation estimates relating to its multi-year
review program across the relevant awards and EAs covering all employees, including the Group's supply chain operations
which had not been previously reviewed. The provisions recognised as at 25 June 2023 represent the Group's best estimate
of the remaining payroll remediation obligations. The provisions remain subject to verification, finalisation of payments to the
respective team members, and the outcomes from any further interactions with the relevant regulatory bodies.
In August 2023, the Wage Inspectorate Victoria issued proceedings against Woolworths Group Limited and a subsidiary,
alleging they had failed to pay over $1 million in long service leave entitlements to 1,235 former employees. The proceedings
seek penalties against each company. The proceedings follow on from the Group having identified underpayments in reviewing
its long-service compliance, bringing those underpayments to the attention of Wage Inspectorate Victoria and other State
regulators, and proactively making full remediation payments to the affected Woolworths team members. Uncertainty remains
in relation to the Group's exposure as a result of these proceedings, as the Group continues to engage with external counsel
and the relevant regulators. Based on the Group's initial assessment, any obligation is not expected to be material.
Salaried team members
On 30 October 2019, the Group disclosed that a number of salaried team members had not been paid in full compliance
with the Group's obligations under the GRIA. The Group has provided in excess of $500 million in relation to the remediation
of salaried team members. The Group has remediated all current impacted salaried team members and continues to
progress the payment of previously employed team members with $482 million paid to date. In June 2021, the Fair Work
Ombudsman (FWO) commenced legal proceedings against the Woolworths Group, seeking orders in relation to alleged
contraventions of the Fair Work Act and for further compensation of affected salaried team members. The trial of the FWO
proceedings in the Federal Court occurred in June and July 2023. The trial is intended to determine issues of liability, and
the principles and methodology applicable to the quantification of remediation for affected team members. Class action
proceedings brought by Adero Law Firm against the Woolworths Group in 2019 have been heard at the same time.
The Group is defending the FWO proceedings and the class action proceedings. While the Group has been guided
by extensive advice from external counsel, the outcome and total costs associated with the proceedings are uncertain.
There is a risk that the Court may determine these matters contrary to the Group's current assessment of the position and
require the Group to make further material remediation payments. During the period, no changes to the estimate of the
provision for salaried team members have been made.
As at 25 June 2023, the Group has a provision of $65 million to settle any remaining obligations reflecting the Group's
estimate of total remediation less the amounts paid to date. Any changes as a result of new information will be treated
as a change in accounting estimate and will be recognised in the Consolidated Statement of Profit or Loss in the period
in which the new information is available.
Hourly paid team members
In completing the remaining compliance testing and remediation estimates for hourly paid team members, the Group's supply
chain operations have now been reviewed. As a result, the Group recognised a provision of $85 million during the period
relating to team member payment shortfalls (including interest and on-costs) predominantly as a result of non-compliance with
EAs for hourly paid team members across the Group's supply chain operations for the 2017 to 2023 financial reporting periods.
2
Business
review
3
Report
Directors'
4
Report
Financial
Other
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