NAB back pays $40.35m as union warns of more wage scandals

As NAB returns another $40m in back pay to staff, a union says underpayments may extend to the sector’s other big players.

NAB has set aside $128m to cover almost eight years of staff underpayments. Picture: Dylan Coker

National Australia Bank has pushed ahead with payments to thousands of current and former staff after the bank recently set aside $128m to cover almost eight years of underpayments.

The latest payments of $40.35m, inclusive of interest and superannuation, have flowed to almost 3000 of the 7773 current and former bank staff identified who were affected by the issue.

This implies average payments of $5191 per staffer, but it is understood some have received substantially more.

The move has put all big four banks under the spotlight, with the union representing workers in the industry saying it was aware of investigations across the banking sector into incorrect payment of staff.

NAB identified its wrongful payment issue at the end of 2019, but upped provisions to $128m before tax late last year.

The bank’s audit identified the historical issues of underpayment stretched from June 30, 2020 as far as October 1, 2012.

More than $26.5m in total, including interest and super, has already been paid by NAB to almost 58,000 current and former bank staff.

The payments issue at the bank relates to incorrect calculations of fortnightly base pay and super underpayments between October 1, 2012 and June 30, 2020.

The latest payments by the bank are believed to be flowing to those in groups three and four in the bank’s repayments schedule.

The Financial Sector Union said the issue stretched to more staff than those previously identified by NAB.

The FSU said it was aware of audits and investigations at Westpac, Commonwealth Bank, Bank of Queensland, and ANZ into issues of underpayment.

CBA previously paid $53m to 41,000 current and former staff in 2019, but was recently accused by the FSU of short-changing staff of $45m by its failure to allow staff a 10-minute tea break.

FSU estimated that 3000 bank staff, entitled to tea breaks, had been blocked from their entitlement under the bank’s 2016 enterprise agreement.

In June last year Westpac committed to paying $8m to 8000 staff who were underpaid their long service leave entitlements.

Meanwhile, in September last year, Bank of Queensland launched an inquiry into whether staff had been incorrectly paid over the past decade, after an internal review uncovered numerous cases of under and overpayment of current and former staff.

On Wednesday, McGrathNicol Partner Siobhan Hennessy said the underpayments issues have emerged in the past decade as regulatory and legislative change made employee remuneration increasingly complex.

“An increased focus on annualised wage arrangements, the use of casuals and misclassification of employee roles has prompted businesses to review employee obligations,” she said.

“These types of reviews often extend back to the appropriateness of the contractual arrangement with the employee, and whether they are a contractor versus employee, or permanent, part-time or casual.”

“This can have a significant impact on assessments of remuneration obligations, particularly if errors are left undiscovered for years.”