The Coles Group Ltd (ASX: COL) share price is in the red on Tuesday.
The slip comes amid news that 2 legal actions brought against the supermarket might be rolled into a giant suit regarding employee underpayments.
At the time of writing, the Coles share price is $18.42, 0.11% lower than its previous close.
For context, the S&P/ASX 200 Index(ASX: XJO) is currently down 0.43%, while the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – the supermarket's home sector – has slipped 0.55%.
Let's take a closer look at what Coles could be battling in the Federal Court next year.
Image source: Getty Images
Could this be weighing on Coles' stock today?
The Coles share price is slipping lower on Tuesday amid news it could be involved in a mammoth Federal Court case.
The supermarket is facing legal action from the Fair Work Ombudsmen. The regulator is claiming it underpaid employees between 2017 and 2020. The legal suit involves the underpayment of 8,767 employees.
The ombudsmen commenced legal action against the supermarket last year. At the time, the underpayments were said to come with a price tag of $115.2 million.
Coles is also facing a class action on the matter.
Meanwhile, Coles' peer, Woolworths Group Ltd (ASX: WOW), is facing costs of at least $571 million after it underpaid 19,000 staff members from 2015 to 2019. It's also facing a regulatory case and a class action on the issue.
Now, Federal Court judge Nye Perram says the supermarket giants' 4 respective legal actions could be merged into 1 hearing. That's because substantial matters in both suits are similar – though, not identical.
They will both address tier 1 issues – those that question the interpretation of the General Retail Industry Award, the Fair Work Act, and employment contracts.
They will also cover tier 2 issues – questions of law mixed with questions of facts, such as exact positions of salaried employees.
"The issues in all four proceedings substantially overlap in relation to tiers 1 and 2," Justice Perram wrote in his decision. He continued:
This suggests that they should be heard together in some fashion in relation to those issues.
I do not think enough is presently known to determine just how they should be heard. This will not become clear for some time.
Justice Parram fixed all 4 cases for a 7 week hearing, starting in June 2023.
Coles share price snapshot
The Coles share price has been outperforming the ASX 200 in 2022 so far.
The supermarket's stock has gained 2.7% year to date. Meanwhile, the ASX 200 has slipped 1.9%.
Coles' shares have also risen 16.5% over the last 12 months compared to the index's 6.7% gain.
