Westpac faces investigation for underpaying staff

Westpac admitted to owing 8000 staff entitlements a few years ago. Sources say a new inquiry could see it repay tens of millions of dollars.

Westpac is facing a new investigation into underpaying staff, after the major lender admitted to owing $8 million to 8000 employees back in 2020.

The nation’s oldest bank said back in 2020 that an internal review had revealed a calculation error for long service leave entitlements.

But its now been revealed that Westpac is facing a fresh inquiry with the Fair Work Ombudsman, and sources close to the investigation told The Australian that Westpac may end up having to repay tens of millions of dollars to employees.

The problem is believed to be around time sheets, incorrect loading and meal entitlements.

“The Fair Work Ombudsman is conducting an investigation relating to Westpac after the company disclosed that it is reviewing pay-and-entitlements issues that are separate to those covered by the company’s 2021 Enforceable Undertaking with the Fair Work Ombudsman,” a spokesman said about the latest case.

“We expect any employers that identify noncompliance to fully co-operate with our investigations to ensure that employees are quickly repaid any outstanding entitlements. Any workers with concerns about their pay should contact us.”

Any concerned workers have been urged to contact the Fair Work Ombudsman. Picture: NCA NewsWire / Paul Jeffers

A Westpac spokesman said all long-service leave underpayments from the previous case had been returned to the current and former employees that it could locate with interest, as individual payments ranged from less than $1 to more than $75,000.

However, the spokesman refused to comment on the latest probe.

He added that Westpac “has been undertaking a broader review of its payroll system and where we find an issue, we fix it and repay all current and former employees their correct entitlements, with interest”.

In the last three years a number of prominent companies have to had to deal with underpaying staff including the Commonwealth Bank, which had to pay back $63 million, while National Australia Bank has set aside $128 million for repayments.

Westpac isn’t the only company to be caught up in underpayment issues, Picture: NCA NewsWire / John Gass

Federal Court proceedings have been commenced against CBA and CommSec for alleged contraventions of the Fair Work Act for failing to pay 7425 workers $16.44 million.

Outside banking, Woolworths, Bunnings, Qantas, Michael Hill, Bupa and 7-Eleven have also been caught underpaying staff.

A PwC report in 2020 estimated there were around $1.35 billion in staff underpayments every year in Australia, blaming complex awards where some contain over 10 separate rules that affect overtime accrual and mistakes were sometimes found only years later.

“Penalty rates, annualised salary provisions, notification requirements for change of roster rules all vary across awards, industries and sectors, creating a broad runway for errors to be made by employers,” it said.