Aurizon admits underpaying staff

Rail heavyweight Aurizon has become the latest corporate giant to fall afoul of Australia’s underpayments plague.

Aurizon owes more than $3m to 3300 workers. Picture: Brendan Radke

Rail heavyweight Aurizon has become the latest corporate giant to fall afoul of Australia’s underpayments plague, after discovering it owes more than $3m to 3300 workers over a payroll glitch that went unchecked for six years.

Aurizon launched an effort to contact former employees in September, sending a letter to their last known address asking former workers to touch base in order to collect lost wages — along with interest payments.

The Queensland-based rail haulage company said it discovered the underpayments during a payroll system update, attributing the problem to faulty calculations when splitting annual salaries into 26 fortnightly payments — and a 27th every 11 to 12 years.

It is understood employees were dudded about 0.3 per cent of their wage in most years, due to the mistake in calculating the difference in pay owed across leap and ordinary years. But in one year workers were overpaid about 3.5 per cent of their annual wage when a 27th fortnightly payment fell due. Aurizon told workers it would not seek to claw back that overpayment.

Like Woolworth’s November admission that it owes about 5700 workers as much as $300m, ­Aurizon’s underpayment affects staff on annual salaries and contracts, hitting mostly white collar, management and technical staff, and not blue collar workers paid under collective agreements.

A spokesman for Aurizon told The Australian the company had promptly repaid about 1600 current employees as soon as the error was discovered, and had apologised for the mistake.

But he said the company was still going through the laborious process of identifying and contacting 1700 former workers affected by the underpayments, saying payments would be made as soon as employees made contact and were able to verify their identity and work history.

“Through an upgrade of our payroll system we identified an inconsistency between the way we expressed annual salaries and the way we processed fortnightly pay for employees and former employees under total fixed remuneration (contract-level employees) arrangements,” he said.

“It has now been rectified with current employees and we are working through processing the matter for former employees. In both cases Aurizon will not recover any overpayments and any underpayments are being repaid with interest.”

Aurizon joins corporate heavyweights including Woolworths, Wesfarmers — and separately its hardware arm Bunnings — 7 Eleven, Super Retail and the WA Education Department in discovering long-term underpayments.

Wesfarmers revealed it had underpaid up to 6000 workers in its industrial and safety arm by $15m over a decade. Bunnings admitted in September it owed up to 40,000 workers $6.1m in unpaid superannuation contributions, and Michael Hill jewellers confessed to having underpaid retail staff over six years, with back pay and interest set to cost the chain up to $25m.

The rush of corporate underpayment confessions — separate to allegations of deliberate rip-offs in the retail and hospitality sector, such as the 7 Eleven scandal — has been partly attributed to a change in the way the Australian Taxation Office requires corporations to report salary payments.

In November Attorney-General Christian Porter said the federal government was finalising a draft bill proposing the criminalisation of “serious and blatant” cases of wage theft.