Commonwealth Bank’s compensation to underpaid staff tops $53m

CBA boss Matt Comyn admits it’s unacceptable that more than 41,000 staff were not paid their correct entitlements.

Commonwealth bank will repay 41,000 current and former employees. Picture: AAP

The Commonwealth Bank has revealed employee underpayments have blown out to $53 million, with 41,000 current and former employees not paid their legal entitlements since 2010.

The disclosure of the higher underpayments, more than three times previous estimates by the Finance Sector Union, follows a long-running review of employee entitlements that was launched by the bank in early 2018.

The bank said on Friday that $13.2m had been backpaid to staff, with a further $14.9 million to be returned from next week. The bank said its review was “substantially complete” and it expected a further $25 million would be backpaid by June 30 next year.

About 60 per cent of the 41,000 workers are current employees of the bank, and staff impacted range from middle managers through to front line staff.

The bank’s payroll system failed to accurately calculate a range of entitlements, including overtime, penalty rates and leave. Interest will be paid on the back payments. Where applicable, leave balances have been increased and additional superannuation contributions paid.

CBA chief executive officer Matt Comyn said on Friday that it was “unacceptable that some of our people were not paid the correct entitlements”.

“This should never have happened and I apologise to anyone impacted by these past errors,’’ he said. “Our priority is to complete the payments with interest and, where applicable, superannuation.”

Fair Work Ombudsman Sandra Parker has been conducting an investigation into the underpayments.

“As this investigation is ongoing, it is not appropriate to comment further. Any workers with concerns should contact us directly for assistance,” a spokeswoman said.

Estimates by accounting firm PwC suggest worker underpayments are as high as $1.35 billion per year, with 13 per cent of the nation’s workforce impacted.

Australia’s publicly-known worker underpayment bill exceeds $500m, with supermarket giant Woolworths admitted underpaying almost 6000 employees by up to $300m over nine years.

Other high-profile cases include 7-Eleven ($150m), Supercheap Retail ($32m), Michael Hill ($25m) and the ABC ($23m).

According to Ms Parker, 22 separate large underpayments by big companies have been revealed in 2019 alone, tipping the FWO into the “corporate regulator space” for the first time.

Attorney-General Christian Porter has accused companies of being “hopeless” when it came to ensuring workers were properly paid. He said many employers spent more time on minimising tax than their workplace obligations.