ALDI will make further payments to current and former store and warehouse workers over claims of unpaid time before and after rostered shifts. No money will be deducted for legal fees or litigation funding. The Federal Court has approved the settlement of a class action brought on behalf of 32,308 employees.
Justice McElwaine approved the settlement of the class action on 23 October 2026 in Boi v Aldi Foods Pty Ltd [2026] FCA 1576. He acted under s 33V of the Federal Court of Australia Act 1976 (Cth), which requires the court to be satisfied that a class action settlement is fair and reasonable for the group as a whole. The SDA estimates ALDI’s total liability, including payments already made and interest, at approximately $55.2 million. That figure combines approximately $28.9 million in earlier voluntary payments, an estimated $16.3 million in additional liability under the settlement, and an estimated $10 million in interest.
Ten minutes either side of a shift
The claims alleged that ALDI failed to pay entitlements due under its enterprise agreements, in contravention of s 50 of the Fair Work Act 2009 (Cth). Store employees claimed they worked before and after rostered shifts without pay. Warehouse employees claimed they were required to perform pre-commencement tasks before their rostered start time.
For store staff, the claims centred on the Kronos time-keeping system. Under a rounding rule, staff could clock on as much as 10 minutes early or clock off as much as 10 minutes late, and Kronos would reset the recorded start or finish time to the rostered time. The court recorded that “store employees were not paid for the actual punch in or punch out time spent at work.” Ali Amin, an industrial officer of the SDA, gave evidence that ALDI corrected the system in about March 2023.
A voluntary program that left half the group unpaid
The litigation followed a 2022 decision of Judge Humphreys in the Federal Circuit and Family Court. That decision found that tasks performed by four warehouse employees at ALDI’s Preston Distribution Centre before their shifts constituted work. Before that decision, ALDI understood such tasks to be “getting ready for work”, which attracted no payment under its agreements.
ALDI then reviewed its practices and made voluntary payments backdated to March 2017. In the SDA’s assessment, the program fell short of full compensation for current employees and left former employees uncompensated. Of the 32,308 group members, 16,378 have received no voluntary payment.
Two proceedings were filed on 27 October 2023. One was the class action (a representative proceeding run by three named workers on behalf of the wider group). The other was a parallel SDA claim seeking declarations and penalties. The parties negotiated for approximately 14 months after mediation was ordered.
that it had not breached the enterprise agreements. It settled on a without-admissions basis. Its adjourned applications to dismiss or strike out the claims denied that any group member had performed unpaid work for which they were entitled to be paid, or that ALDI had authorised or directed any such work.
that ALDI’s voluntary program missed entitlements, including interest and payments to former staff. Mr Amin’s evidence was that the agreed method would compensate group members for “the substantial majority of the claims advanced on their behalf”.
that the settlement was “within the reasonable range of potential outcomes” and fair as between group members, and that it was appropriate for ALDI to administer it.
How the union’s costs were met without touching workers’ money
The court described the settlement as “atypical”. ALDI will pay the SDA a $1.5 million costs contribution within 14 days of approval to settle the penalty proceeding. That amount covers the union’s costs of funding both cases. There is no litigation funder and no commission. From the $1.5 million, the SDA pays $10,000 to each of the three applicants in recognition of their time.
Justice McElwaine said there was no basis to think the SDA and ALDI had struck a “deal” to discount the $1.5 million. He reasoned that workers are not disadvantaged by the SDA not pursuing the penalty proceeding to trial, because if successful the SDA would have sought an order under s 546(3)(b) of the Fair Work Act that any penalty be paid to it.
Both cases were brought in a no-costs jurisdiction under s 570 of the Act, meaning each side ordinarily bears its own costs. The judge said he considered it “inevitable that as costs mounted the SDA would have applied for a common fund costs order”. Such an order would have allowed the SDA to recover its costs from the group’s recovery, and the judge said the amount for group members would then have reduced proportionately. He accepted an estimate that trial costs could have reached about $18 million, with an initial trial not expected to begin until mid-2028.
What the workers gave up
The SDA and the applicants made several concessions:
- pre-shift and post-shift time is offset against late starts and early finishes within each fortnightly pay period;
- interest is capped to March 2025;
- interest is offset against voluntary payments for periods before 27 October 2017;
- a claim for loss of amenity over unpaid breaks was dropped.
Mr Amin said the offset concession “may in fact reflect the correct legal position”. He pointed to a recent decision of Justice Perram in separate proceedings involving Woolworths and Coles.
Warehouse staff, current or former, who are not identified as having done pre-commencement tasks get nothing further under the settlement.
“I accept that the methodology for assessing and paying the entitlements of Group Members is not perfect, however, it is a fair method to assess, determine and pay the entitlements of a very large class of employees.” Justice McElwaine
ALDI runs the payout, and must report what goes unclaimed
The court appointed ALDI as scheme administrator (the party that calculates and pays individual entitlements). It did so because ALDI holds the records and has already done much of the calculation. Current employees will be paid through payroll without registering. Former employees must register through a portal to be paid. PwC and KPMG will review calculations on request, a review cannot reduce the amount first notified, and the SDA has a separate right to audit ALDI’s compliance.
Before the case is dismissed, ALDI must report the total amount paid, and the number of unidentified group members and the value of entitlements that would have been paid to them. The judge said this “will enable the Court to consider for itself how much of the settlement money will effectively be retained by ALDI.”
The parties aim to notify all known group members of their amounts by 15 April 2027, with payments to commence after the review date of 20 May 2027, possibly earlier. The court approved the settlement on condition that ALDI’s payments are made before 31 March 2027 or before the proceeding is dismissed, whichever is later.
Seventeen group members opted out. One former employee objected that a voluntary payment of $1,285.92 did not reflect the 20 to 30 minutes of unpaid work he estimated he performed per shift. The judge found the objection did not weigh against approval. He noted the independent review mechanism remains open to the former employee if he registers.
The settlement binds the applicants, ALDI, all group members who did not opt out by 12 August 2026, and the SDA. The application to dismiss the proceeding with no order as to costs has been adjourned to a date to be fixed.
At a glance
- Parties: Three current and former ALDI employees, on behalf of group members, v ALDI Foods Pty Ltd. A parallel SDA penalty proceeding was settled as part of the same proposal.
- Citation: Boi v Aldi Foods Pty Ltd [2026] FCA 1576 (Justice McElwaine, 23 October 2026)
- Section: s 33V Federal Court of Australia Act 1976 (Cth). Claims under s 50 Fair Work Act 2009 (Cth).
- Outcome: Settlement approved without admissions. Total estimated at approximately $55.2 million including earlier voluntary payments and interest. $1.5 million costs contribution paid to the SDA. No deductions from workers’ payments.
- Who it affects: 32,308 current and former ALDI store and warehouse employees covered by its enterprise agreements during the claim periods.
Source: [2026] FCA 1576
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