The “Every Payroll” Rule: The Court Case That Shook Up Every Aussie Pay Slip
You know that feeling when payroll week finally wraps and you think, “Sweet, that’s sorted.”
Turns out, not anymore.
After a blockbuster Federal Court case involving Coles and Woolworths, every Australian business — from a national chain to the corner café — just got a new rulebook.
The Court’s message?
Paying salaries isn’t a shortcut. It’s a promise you have to prove — every single pay run.
Welcome to the Every Payroll rule.
And if you hire even one person, this matters to you.
How the giants got it wrong
Coles and Woolies thought they were doing payroll right.
They paid managers annual salaries under the General Retail Industry Award.
No messy calculations, just steady pay.
But when the Fair Work Ombudsman dug in, it found thousands of staff missing weekend rates, overtime, and allowances.
Even after Woolworths repaid more than $300 million and Coles about $7 million, the Federal Court still ruled:
You can’t “average out” award entitlements over a year.
Each pay period must stand on its own.
PwC Legal called it “a wake-up call for all employers.”
Translation: if someone’s award entitlements for the fortnight come to $2,300 and their salary pays $2,100 — you owe $200 that pay cycle.
A top-up next month won’t fix it.
It’s not the total that matters anymore.
It’s the timing.
The part no one talks about — the records
The Court didn’t stop at salaries. It zoomed in on record-keeping, the unglamorous side of payroll most owners ignore until it’s too late.
Even salaried staff trigger these rules:
Daily start and finish times (including overtime).
Details of penalties, loadings, and allowances.
Data that’s readily accessible — not hidden in roster apps.
If you can’t produce clear records, the law flips the burden of proof.
That means you must prove you didn’t underpay them.
So if your system’s a patchwork of timesheets, emails, and trust… this ruling just put a target on it.
Why this hits small business hardest
Big retailers can write a $300 million cheque and keep moving.
Small businesses? Not so much.
And most startups use salaries to keep admin lean — “one number, one pay run.”
That convenience now carries risk.
Because if your software, contracts, or spreadsheets can’t show compliance each pay period, you’re gambling without realising it.
And Fair Work doesn’t care if it was an accident.
The consent curveball
The Court also warned: “agreement” isn’t enough anymore.
If you vary award conditions — say, shorten breaks or shift start times — you must prove the employee understood and accepted the change.
Real consent. Not a shrug.
Not “they’ve always done it.”
Every variation needs clarity in writing and evidence they knew what they were giving up.
Five things to do before your next pay run
Know the award.
Even salaried roles might be covered. Check before assuming.Run an “every-payroll” check.
Compare each pay run to the award for that exact period.Centralise records.
One clean source of truth — times, penalties, allowances.Update contracts.
Old set-off clauses may fail under this ruling.Get help early.
Fixing small errors now is cheaper than headlines later.
The bigger picture
This isn’t about catching businesses out.
It’s about making sure pay stays fair and transparent.
And honestly, that’s good for everyone.
Fair systems build trust. Trust builds loyalty.
Loyal teams build strong businesses.
At Alluvia Financial, we help small businesses stay ahead of changes like this — turning confusing payroll rules into clear, automated systems that protect you and your people.
Before this ruling becomes your next stress headline, let’s talk.
👉 Book a payroll check-up.