Woolworths Group Ltd (ASX: WOW) shares are seeking direction today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed Friday trading for $27.59. In the first two hours of trade on Monday, shares have vacillated between a low of $27.42 and a high of $27.76 apiece. At the time of writing, shares are flat, right back at $27.59.
For some context, the ASX 200 is down 0.4% at this same time.
This comes as both the company and investors try to gauge the potential impacts of Friday's Federal Court of Australia decision on Woolworths shares.
Here's what's happening.
Image source: Getty Images
Woolworths shares could face $750 million underpayments hit
As you're likely aware, on Friday, 5 September, the court handed down its judgment in the long-running case involving allegations of underpayments to award-covered salaried Woolworths employees.
Woolworths shares have periodically faced headwinds as the case moved forward and made financial media headlines.
It first came to light back in 2019, when Woolworths reported to the regulator that it had not met the requirements of the GRIA and the FWA in relation to thousands of its salaried employees from 2013 to 2019. The supermarket launched its own investigation and has since made repayments of more than $330 million to affected workers.
As the supermarket noted on Friday:
The judgment relates to proceedings brought by the Fair Work Ombudsman (FWO) in 2021, and a class action (in 2019), over Woolworths Group's interpretation and application of the General Retail Industry Award 2010 (GRIA), and the Fair Work Act (FWA), in its remediation payments to salaried employees.
"We are focused on resolving these underpayment issues. We are committed to ensuring that our team members are paid correctly," Woolworths CEO Amanda Bardwell said.
Woolworths shares closed down a modest 0.3% on the day.
Noting that the court's "judgment is complex and extensive", the ASX 200 retail giant promised to carefully review the judgment.
The company added, "Any quantification of further remediation payments, if any, will require an extensive, detailed review and analysis across many thousands of potentially affected team members."
In an update released shortly before market open this morning, Woolworths released its preliminary analysis on those upcoming remediation payments.
ASX 200 supermarket facing raft of undetermined issues
Ongoing uncertainty in the case could continue to hamper Woolworths shares, with the company noting the court's decision will require "significant and widespread changes" to accepted retail practice for its own operations, as well as all Australian businesses regardless of their size.
And Woolies said it was too early to consider any appeal of any aspects of the decision. The company noted that a case management conference has been listed for 27 October 2025 to consider the further conduct of the proceedings with many issues still to be determined, adding that "no other substantive orders have been made".
What the company does know is that getting off the legal hook and moving on with business as usual is likely going to be costly.
Management estimates that the one-off additional impact of the court's findings is expected to be in the range of $180 million to $330 million post-tax ($250 million to $470 million pre-tax). And interest, superannuation, and payroll tax could add another $140 million to $200 million post-tax ($200 million to $280 million pre-tax) to Woolies' net liability.
Woolworths shares are down 20% since this time last year, not including dividends.
