Own Woolworths (ASX:WOW) shares? Here’s why the company is making news this week

A delivery driver hands over groceries to an older woman at her front door.

Woolworths Group Ltd (ASX: WOW) shares are inching higher on Wednesday. This is despite the supermarket giant’s involvement in contentions regarding pay standards for its delivery drivers.

At the time of writing, the Woolworths share price is trading hands at $40.33, up 0.24%. This puts the company’s share price 4.11% away from its recent all-time high of $41.99. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.3% from its previous close heading into afternoon trade.

Woolies stuck in a payment problem

Australia’s ninth-largest company is the spectacle of a parliamentary inquiry regarding the pay and work conditions of delivery drivers. Importantly, the drivers in question are not Woolworths’ employees. Rather, they are the drivers sourced through its partnership with UberEats.

On Monday, Australian Labor Senator Tony Sheldon accused Woolworths of turning a blind eye to the conditions to which UberEats delivery employees are subject. Correspondingly, Senator Sheldon purported that the multibillion-dollar ASX-listed company is neglecting its responsible sourcing standards in the process. Despite this, Woolworths shares are humming along on Wednesday.

Furthermore, Tony Sheldon provided his argument against the supermarket giant, stating:

Numerous academic reports of UberEats work has been paid significantly below the minimum wage on average about, $10.42 an hour in some cases, as low as $6.67 an hour and others.

They don’t show their workers receive a living wage. Aren’t you perpetuating a starvation wages strategy if you don’t have a proper oversight and require these companies to be paying workers comp and paying minimum wages?

In its defence, Woolworths is arguing that it can’t be held responsible for the payment of another company’s workers. Additionally, the grocery retailer highlighted that the work comes under independent contracting under the Fair Work Commission.

Uncanny timing for Woolworths shares

These allegations from the senator come mere days after Woolworths announced the settlement of class action proceedings. Ironically, these proceedings were in relation to its salaried team members, for which the company is certainly responsible.

In that announcement, the company revealed it had reached a settlement to remediate current and former team members. Approximately 20,000 staff will receive payment of $2,500 plus superannuation. As a result, the total remediation costs are around $50 million.

Woolworths shares rose higher on the settlement news, much like the company’s move today.

The post Own Woolworths (ASX:WOW) shares? Here’s why the company is making news this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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