Macquarie Group settles pay dispute with former stockbrokers

A dispute with a group of stockbroking advisers over unpaid entitlements, including annual leave, has been concluded.

Macquarie has settled a dispute with a group of stockbroking advisers. Picture: Bloomberg

Macquarie Group has avoided a court stoush and settled a dispute with a group of former stockbroking advisers over unpaid entitlements, including annual leave.

Court filings show the Federal Circuit Court matter between a group of former staff led by Joshua Bull against Macquarie was closed in late February, due to “assisted dispute resolution”. Details of the settlement are confidential.

Two further groups of former advisers are understood to be headed for mediation with Macquarie this month, with the separate meetings scheduled for March 6 and March 13. The advisers are claiming breaches of the Fair Work Act by Macquarie relating to claims of underpaying annual leave, public holidays, leave loading and compassionate and carer’s leave.

Sources suggested Macquarie’s view had softened around defending the legal action, given the heightened scrutiny of banks and their pay structures that followed the Hayne royal commission.

A Macquarie spokeswoman declined to comment.

The latest settlement is said to follow a 2017 agreed resolution between Macquarie and eight former directors and advisers, on similar pay entitlement issues.

Mr Bull is now employed by Ord Minnett.

While Macquarie’s advisers are employees, their pay was largely commission-based and linked to a percentage of the revenue they brought in. The court actions claimed Macquarie remunerated them through the commission structure, which sees employees paid a recoverable advance, which did not satisfy Macquarie’s obligations to pay their award and statutory entitlements.

The groups of former advisers claim Macquarie failed to comply with National Employment Standards and the modern award covering the banking, finance and insurance industry.

A John Wardman-led group is seeking to be reimbursed for total underpayments of $2.6 million plus interest, penalties and legal costs and also wants Macquarie to be issued with pecuniary fines.

The advisers in that action are now at a range of rival firms including Shaw and Partners, Ord Minnett and Bell Financial Group, or have retired from the industry.

Last year, The Australian revealed that Macquarie was scrapping the commission-based pay structure for advisers from April 2019. The decision, which followed an overhaul of the group’s private wealth division, sees Macquarie shift to a salary and profit share model for all advisers.

Macquarie’s private wealth unit had caused the bank headaches including a two-year enforceable undertaking with the corporate regulator for shoddy practices and lax compliance. That came to an end in 2015, although Macquarie remained on probation for another 12 months.

Former Macquarie chief executive Nicholas Moore was questioned over the failings and subsequent undertaking during his time in the witness box at the royal commission.

He told Commissioner Kenneth Hayne in November, that Macquarie had overseen a detailed remediation program and brought the stockbroking unit under the umbrella of the group’s broader risk management system.

“With the benefit of hindsight it was fortunate that it was brought to our attention so we could take the steps we did,” Mr Moore said, noting that consequences for those involved included being fired or not being considered for promotion.