Photo: Coles says all affected employees will be contacted. (ABC News: Tom Joyner)
Coles says it has underpaid staff in its supermarket and liquor stores and has set aside $20 million to pay back employees.
The company said it was reviewing arrangements for staff who were paid a salary under the General Retail Industry Award (GRIA) and had so far found about 5 per cent of supermarket and liquor store managers were not paid correctly.
The total underpayments plus interest came to $16 million from its supermarket arm and $4 million from the liquor division and affected 1 per cent of total staff.
Chief executive Steven Cain apologised to affected staff and said they would be contacted once the review was finalised.
"We aim to make Coles a great place to work, and apologise to those team members who have been unintentionally affected," he said.
"We are working at pace with a team of external experts to finalise our review. Once completed, we will contact all affected team members, both current and former, to remediate any identified differences in full."
Underpayment revealed in half-year earnings
Australia's second-biggest grocery chain posted near-flat half-year earnings today as it included a $20 million cost provision for the underpaid employees.
Earnings before interest and tax for the 27 weeks that ended on January 5 came in at $725 million compared with $722 million a year ago.
It was within the $710-730 million range the firm gave in a surprise update in early February.
Net profit for that period rose 1.7 per cent to $498 million.
Coles earlier this month said an effective Christmas campaign helped it post better-than-expected sales at its key supermarket division, while more promotional and clearance activity weighed on its liquor business.
Total sales revenue, which includes supermarkets, liquor and fuel and convenience retail businesses, rose 3.3 per cent to $18.9 billion.
Coles declared an interim dividend of 30 cents per share, its first half-year dividend since it was spun off from retail conglomerate Wesfarmers Ltd in late 2018.