Wesfarmers Returns to Bundy Clock System
It has been an extremely exciting week for Wesfarmers. The owner of Bunnings, Officeworks and Kmart has released its half-year results on Wednesday, 19th February boasting a 4.4 per cent increase in net profits from continuing operations to $1.13 billion. The results surpassed a general forecast of approximately $1.09 billion. Specifically, growth from Bunnings, Officeworks and Kmart offset the weaker results from Target, chemicals and fertilisers businesses.
Upon the release of the results, Wesfarmers shared that it had uncovered further loopholes in payrolls after issues of underpayments in its Bunnings and industrial division surfaced last year. Specifically, staff from its Target department store were reportedly underpaid by $9 million over ten years. Yet, the company asserted that cases concerned less than 1 per cent of its staff. Specifically, the issue mainly surrounded inconsistencies between hours worked or penalty-rate periods that in turn resulted in hourly rates below that of the award minimum.
The newly introduced award rules due to kick in on 1st march will force employers across twelve industries to note down the start and end times as well as unpaid breaks of salaried staff. This includes employees involved in administrative duties to accountants and graduates. Chief Executive Rob Scott revealed that the firm is left with no alternatives but to return to clocking on systems for its managers. This method is deemed as the surest way to deal with the issue and to leave zero room for errors.
The retail giant will join other major players in overhauling internal processes to introduce new timesheet regulations for salaried employees. This is because salary underpayments have already witnessed Coles offering a $20 million backpay and close to $300 million at Woolworths. Meanwhile, the federal government is in the midst of drafting legislation to curb wage underpayment and is not excluding the idea of requiring firms to “name and shame” themselves, along with jail time for defiant players. Payroll specialists have shared that the change represents the most treacherous and far-reaching workplace requirements in the past ten years.
Further to the announcement made early in the week, Wesfarmers has also confirmed that trades have been executed for the sale of one-third of its 15 per cent stake in Coles for $1.05 billion. The decision will leave Wesfarmers retaining minority ownership of 10.1 per cent in the chain. The decision came shortly after Coles, which spun off from Wesfarmers in November 2018, admitted that it had underpaid more than 1000 salaried store managers amounting to $15 million over the past six years.
Regarding the impact of the coronavirus, Wesfarmers revealed that it is considering alternative sources of stock should the virus cut supplies of homewares, hardware and office supplies from China. However, Mr Scott remains confident about the firm’s performance as consumer sentiment appears to be improving despite the challenges the country faces. Additionally, he believes Kmart, Bunnings and Officeworks are well-positioned to cater to customers' demand for greater value.
By Caroline Wong
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