Coles and Woolworths set up 'foreign' pay system

It comes after Coles last week said it had set aside another $25 million to repay salaried managers it underpaid for years, while Woolworths has previously disclosed underpaying thousands of employees to the tune of around $390 million.

In his opening address, Fair Work Ombudsman barrister Justin Bourke KC argued the "entirely foreign" payment structure covering some workers would always "end badly for Woolworths and Coles and its employees".

"It was like trying to put a square peg into a round hole," Mr Bourke told the court.

He took Justice Nye Perram to the relevant award, arguing work hours were set at a total of 38 rostered hours per week, before contending that was not what happened in reality.

In an "extreme" example, Mr Bourke said one team manager in Sydney was working 13 hours a day.

Other workers were doing average shifts of nearly 11 hours, he said.

"That can't be because the fridge blows up every day," the barrister said.

He said evidence would show clear standards had to be met by the companies, and that there was tacit approval of the alleged illegal conduct, submitting they knew people were working above rostered hours "day in day out".

There were failures on the use of "informal" rosters, time off in lieu, and record keeping on worker overtime, penalties and allowances, he said.

"No one blew a whistle," Mr Bourke said.

"They knew it was going on and they have to pay for it."

He said the supermarkets should not be able "to hide behind the fact" they had very limited and ad hoc records tracking things like time off in lieu, and argued there was no ability to "contract out" of obligations under the Fair Work Act.

"That shouldn't be how it works," he said.

Claims workers could have just walked out the door were "divorced from reality", he said.

The trial, listed to run for seven weeks, continues.