Westpac will be issuing $6 million in back pay to employees as part of an enforceable undertaking with the Fair Work Ombudsman (FWO).
The bank referred itself to the FWO in April 2020, following an internal review that revealed that it had underpaid the long service leave entitlements of Australian workers.
Westpac blamed payroll system errors for the issue, which saw it fail to take into account the overtime work, average weekly hours, bonuses, commissions and sick leave of employees when calculating long service leave.
The issue meant that several thousand employees across both the Westpac Bank and St George Bank were underpaid across Australia, with those affected ranging from bank tellers to corporate management.
As a result, more than 6,400 current and former Westpac employees will be back paid with superannuation and interest to a total sum of $6 million.
While the bank said that it has already back paid the majority of affected employees, the newly issued FWO undertaking means Westpac will be required to cover the remaining amount by 30 November 2021.
According to the Fair Work Ombudsman, individual underpayments varied with some workers losing out on more than $75,000.
On top of the back pay, Westpac will also be making a $343,866.96 “contrition payment” to the Commonwealth’s Consolidated Revenue Fund.
The bank will also have to issue a formal apology to staff and publish notices on social media and in newspapers detailing its misconduct.
Fair Work Ombudsman Sandra Parker said that Westpac’s cooperation demonstrated a commitment to rectifying underpayments.
“Under the Enforceable Undertaking, Westpac has committed to stringent measures to comply with the law and protect its workforce.”
“This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance each year for the next two years,” she said.
Nevertheless, Ms Parker expects the high bill to strike fear into enterprises and entities both big and small. She invited employers who require assistance to meet their workplace obligations to contact the FWO for advice.
“This matter serves as a warning to all large employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale,” she said.
