Wesfarmers finds more payroll errors in first half

Wesfarmers has admitted to underpaying Target employees, revealing a $9 million payroll error to the ASX alongside its first-half earnings on Wednesday.

“Immediate steps are being taken to rectify identified issues, notify and repay affected team members, including interest, and ensure accuracy in the future through a robust program of auditing and monitoring,” Robt Scott, Wesfarmers’ managing director, said.

The retail conglomerate had already admitted to underpaying staff in its industrial business by $15 million, bringing its total underpayment bill for the half to $24 million. This does not include the $3.8 million repayment made to nearly 41,000 Bunnings employees for incorrect superannuation payments, which occurred in November.

The news follows yesterday’s announcement that former Wesfarmers business Coles underpaid 600 staff an estimated $20 million over the last six years. Michael Hill, MJ Bale, Rebel and Woolworths, which admitted to underpaying staff up to $300 million last year, are just a few in a long list of retailers that have admitted to making payroll errors resulting in underpayments.

Wesfarmers lifted revenue in the first half of FY20 by 6 per cent year on year to $15.2 billion, and reported a net profit after tax (NPAT) of $1.2 billion, excluding the impact of the new lease accounting standard. Including AASB 16, NPAT rose 5.7 per cent to $1.1 billion.

The result was driven by the strong performance of the company’s largest businesses, Bunnings and Kmart, and solid performance in chemicals, energy and fertilisers. The industrial business and Target underperformed expectations.

“Bunnings, Kmart and Officeworks delivered a please trading performance, with sales increasing relative to the prior corresponding period,” Scott said. “Strict working capital management and disciplined capital expenditure also resulted in strong cash flow generation across the Group’s operating divisions.”

More to come.

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