• Coles conducted a review into pay arrangements for salaried team members
• Coles has paid $31 million in remediation costs to date
• Federal Court decision may require further remediation of $150m to $250m

Coles Group Limited (Coles, ASX:COL) announced an update on the Federal Court of Australia's decision regarding the alleged underpayment of salaried managers in Coles' supermarkets. In February 2020, Coles conducted a review into the pay arrangements for all team members who received a salary and were covered by the General Retail Industry Award 2010 (GRIA). Coles has paid $31 million of remediation costs to date and has a provision of $19 million reflected in its financial statements. A class action was instituted in May 2020, and the Fair Work Ombudsman (FWO) commenced proceedings in December 2021 relating to the alleged underpayment and the interpretation of the GRIA and the Fair Work Act. Coles' preliminary estimate is that further remediation of between $150m and $250m may be required to reflect the findings of the Court, including interest and on-costs. This estimate is based on the underpayments alleged by the FWO relating to historical work patterns, adjusted and extrapolated for the period for which Coles has committed to remediation and the broader population of affected salaried team members covered by the GRIA across Coles' supermarkets business. Coles cautions the market from relying on speculative estimates and will provide further updates as appropriate.

Coles estimates further remediation costs of between $150 million and $250 million may be required to reflect the findings of the Federal Court decision, including interest and on-costs.