Healthcare company Bupa underpays 18,000 staff up to $75m

Healthcare giant joins a long list of major companies who have underpaid thousands of workers by millions of dollars for years.

Bupa has underpaid up to 18,000 staff, a review has found. Picture: Julian Andrews).

A payroll bungle has seen Bupa underpay a third of its workforce since 2014 between $65m and $75m, a review has found.

Bupa will pay as much as $75m to tens of thousands of former and current employees who were underpaid over a seven-year period.

The healthcare company announced on Wednesday that following an extensive proactive pay compliance review, about 18,000 current and former staff were underpaid by between $65m and $75 since July 1, 2014.

The healthcare giant joins a long list of major companies who have underpaid thousands of workers by millions of dollars over many years.

The initial findings from the review identified underpayments, as well as some overpayments.

Bupa said deficiencies in internal systems and processes resulted in mistakes being made in the application of some provisions of its 28 enterprise agreements and modern awards.

According to Bupa, the reasons for the underpayments included that workers were wrongly classified under enterprise agreements and awards and should have been paid at higher rates.

Bupa Asia Pacific chief executive Hisham El-Ansary said he was “deeply sorry that we have let our people down” after announcing employees had been left short of their lawful entitlements, not including superannuation, over seven-and-a-half years.

Bupa has notified the Fair Work Ombudsman about the initial findings from its pay compliance review and will begin contacting 18,000 current and former staff from early 2022.

The Fair Work Ombudsman will launch an investigation into the underpayments.

The level of underpayments identified are the result of the “initial findings” of Bupa’s review with “full results” due in early 2022. The FWO investigation could identify a higher level of underpayments.

Workers were underpaid across the company including in its retail, aged care and insurance operations.

Mr l-Ansary said all staff would be paid what they were entitled when the remediation process starts in March.

“I am deeply sorry that we have let our people down and I am determined to ensure that we remedy this fairly for everyone who has been impacted,” he said.

“Our immediate priority is to pay those who have been underpaid, with interest and applicable superannuation, as soon as possible.”

Latest on a long list

Over recent weeks, it has been announced that Westpac backpaid $6 million owed to 6400 former and current employees; Emirates Leisure Retail underpaid airport workers by $5.1 million; labour hire firm Hudson Global Resources admitted underpaying 5325 workers by $4.5 million; and more than 11,000 current and former Red Cross employees were underpaid more than $25m for a decade.

Two weeks ago, the FWO launched Federal Court action against Coles alleging the supermarket giant underpaid 7812 salaried employees a total of $115.2m.

In October, Woolworths flagged it would back pay $50m to staff in October after settling a class action.

Payroll inaccuracies

Bupa conducted the compliance review after discovering instances of potential inaccuracies in its Australian payroll data. Mr El-Ansary said an internal team working alongside external advisers analysed millions of individual pay records, covering some 50,000 current and former employees.

“The annual wage underpayments equate to approximately 1.3 per cent of Bupa’s annual Australian payroll,” Mr El-Ansary said.

Bupa has communicated with its Australian workforce to let them know the initial results of the review and is currently working through the impact on each individual.

“We are strengthening and simplifying our internal processes and systems, including putting in place additional auditing and assurance mechanisms, to ensure we are doing all we can to prevent mistakes like this from happening again,” Mr El-Ansary said.