Mr Banducci apologised unreservedly and said he expected senior executives to lose their bonuses.

ASA chairman Allan Goldin said bonuses for 2019 had already been paid. "The CEO said they could lose their bonuses next year, we're saying what about this year," he said.

ASA representative and Woolworths monitor Don Adams said the association also wanted to know how Woolworths' compensation systems had failed and the chain of events since the first complaint was made. He cited "troubling" reports in The Age and The Sydney Morning Herald on Saturday that Woolworths had initially resisted paying the first complainant overtime and had threatened his employment consultant.

"We will hear what the company has to say, not only in our meeting but over the next couple of weeks, before we finalise our voting intentions in late November," Mr Adams said.

Proxy advisers said they would also be speaking to Woolworths in coming weeks but had yet to compile their recommendations to shareholders and declined to comment.

Woolworths started reviewing salaried staff in February with the assistance of PwC when a handful of managers questioned why they were paid less than union staff under a new enterprise agreement.

Woolworths first alerted Fair Work in August about 'non-compliance' issues but did not reveal the scale of the underpayments until last Wednesday, when it released September quarter sales.

Major companies including Wesfarmers, David Jones and Metcash are now checking payroll processes to make sure they are correctly paying staff.


Meanwhile, Woolworths is pressing ahead with the $10 billion demerger of its liquor, hotel and gaming operations, releasing scheme documents for the restructure of the businesses to create a separate legal entity, Endeavour Group.

Shareholders will be asked to approve the restructure – the first stage in a three-step process that will ultimately lead to the demerger, float or sale of Endeavour Group – at a scheme meeting on December 16, the same day as the AGM.

Woolworths directors unanimously recommended shareholders vote in favour of the restructure, saying the advantages outweighed the disadvantages and risks.

They said the restructure would result in a simplified corporate structure for Woolworths Group by reducing the number of companies and creating potential efficiencies and enabling the merger of ALH and integration of drinks and hotels to facilitate the creation of a cohesive brand and culture.

"Implementing the restructure is an important initial step in achieving this integration," the scheme documents said.

The potential cost savings and efficiencies were not quantified and no new financial information was disclosed.

"Importantly, the restructure scheme will not result in a change in the number of shares that you hold, cause any income tax consequences for you or negatively impact the ability of Woolworths to pay dividends," Mr Cairns said in a letter to shareholders.

However, the first stage of the restructure will lead to one-off transaction and implementation costs of about $108 million, on top of about $23 million in costs incurred in the planning stage.


The subsequent merger of Endeavour Drinks and ALH does not require shareholder approval and is expected to be completed in early February.

Woolworths intends to seek further shareholder approval at stage 3 – the separation of Endeavour Group from Woolworths Group – which is expected to occur in calendar 2020.

Woolworths shareholders have generally welcomed the merger and subsequent demerger, which will reduce Woolworths' exposure to poker machines and possibly lead to a capital return. But some are worried about the dis-synergies and extra costs created by separating businesses that have been inextricably linked since Woolworths first ventured into liquor in 1998.

Woolworths' shares have risen 14 per cent since the merger/demerger was announced in July, although the stock has lost ground following the underpayment revelations.