Recent Federal Court Decision – What This Means for Woolworths & Coles Salary Contract Workers

10/10/2025

Recent Federal Court Decision - What This Means for Woolworths & Coles Salary Contract Workers

Are you an employee of Woolworths or Coles on a salary contract? If so, the recent Federal Court decision may impact you.

On 5 September 2025, the Federal Court handed down an important decision in FWO v Woolworths Group Limited; FWO v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092.

What the Court found

The Court ruled that Woolworths and Coles could not rely on above-award payments made in some pay cycles to make up for shortfalls in others. Instead, every single pay cycle must meet or exceed the relevant award entitlements.

This means it is not enough that a worker is better off across the year, and your employer must ensure your pay for each week, fortnight, or month meets the award minimums for that specific period.

The Court also highlighted that employers must keep proper records of overtime and penalty-rate hours. Failure to do so breaches the Fair Work Act.

Why This Matters for Workers

For many employees, particularly in industries like retail, hospitality, and services where hours fluctuate seasonally, this decision may expose underpayments that were previously ‘hidden’ within annual salary arrangements.

If you have ever worked longer hours during busy periods and felt your salary did not reflect that workload, this decision could apply to you.

The case found that Woolworths and Coles have not always recorded employees’ overtime and therefore have not been incurring the associated overtime loading, pursuant to the Award.

In the lead up to Christmas, where it is likely that Coles and Woolworths employees will be asked by their employer to work overtime hours in addition to public holidays, it is important that employees are checking their payslips and ensuring the applicable loading and penalty rates are being applied every pay cycle.

Impact on Injured Workers

If you are a worker who has sustained an injury whilst employed at Coles or Woolworths and receiving workers compensation weekly payments, this decision could have an impact on the calculation of your pre-injury average weekly earnings (PIAWE).

If you are a worker that sustained an injury at Woolworths or Coles, Foye Legal can review your earnings to ensure your PIAWE is calculated correctly, so that you are receiving the correct weekly payments from the workers compensation insurer.

What Should you Expect from Your Employer

Fair Pay Every Pay Cycle: Your salary for each pay cycle must meet the hours you've worked, and the entitlements outlined in your award. Employers cannot rely on payments made earlier or later in the year to cover shortfalls.
Transparency in Pay: Employers should provide clear records showing how your pay is calculated, including overtime and penalty rates. If you're unsure about your entitlements, ask for a breakdown of your pay.
Accurate Record-Keeping: Employers must keep detailed records of the hours you work, especially if those hours include overtime or penalty rates. This ensures you're paid correctly and protects your rights. You also should be provided payslips each pay cycle.
Compliance with Awards: If you're covered by an award, your employer must follow all the rules outlined in the award, including minimum pay rates, penalty rates, and loadings.

How Foye Legal Can Support You

Foye Legal is here to stand with workers to ensure they are receiving all their pay entitlements.

Our Employment Law team can:

This decision is a major step toward protecting workers’ rights and ensuring supermarket employees’ salaries reflect the actual work they performed.

If you have concerns about your pay or record-keeping practices of your employer, please do not hesitate to contact our office for a confidential consultation.