Westpac owes 8000 workers $8 million in latest underpayment scandal

The major lender has apologised and promised to repay staff the millions of dollars owed “as soon as possible”.

Westpac has become the latest Australian institution to become embroiled in an underpayment scandal after the major lender admitted to owing $8 million to 8000 staff.

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

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It blamed the methodology used which failed to determine long service leave entitlements in situations where staff members had changed their work arrangements, such as moving from full-time to part-term work.

The system failure also led to some workers being overpaid but the bank said it would not be asking any staff to return what they were given.

“We apologise to anyone impacted by these errors and our priority is to make payments as soon as possible,” Westpac group executive for enterprise services Alastair Welsh said.

Westpac’s system error overpaid and underpaid thousands of staff. Picture: AAP Image/Ellen Smith

“For long service leave entitlements, different rules apply to different employees based on their employment history and work arrangements. Regrettably, our system didn’t correctly capture the right methodology every time.

“We are putting in place measures to ensure employee long service leave is correctly calculated.”

The announcement comes following a dismal stretch of widespread wage theft cases across retail networks, hospitality businesses and other employers before the coronavirus dominated headlines.

In October, Woolworths revealed it owed nearly 6000 salaried team members over nine years, amounting to $300 million.

Major restaurant players were also guilty such as Neil Perry’s Rockpool Dining Group, which owes staff at least $10 million, and fellow celebrity chef George Calombaris, who repaid workers $7.8 million.

Others included the ABC, Target, Qantas, Commonwealth Bank, Sunglass Hut, 7-Eleven, Bunnings, and Super Retail Group.

The scale of workers being ripped off infuriated Attorney-General Christian Porter who blasted corporate Australia for the “endemic problem” and threatened to introduce new industrial relations reforms to name and shame those guilty of wage theft.

“Get your house in order,” he said in February.

“We’ve had large organisations that involve themselves in any number of social issues that spend an enormous amount of time, money and effort self-promoting with PR campaigns and national advertising telling us how good they are.

“Pay your people properly.”