Commonwealth Bank underpayment of staff hits $53m

The Commonwealth Bank has revealed underpayments have blown out to $53m, affecting 41,000 current and former staff.

The bank said on Friday that $13.2m had been backpaid to staff and a further $14.9m would be returned from next week. Picture: Bob Finlayson

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

The disclosure of the higher underpayments, more than three times the estimates of the Finance Sector Union, follows a long-running review of employee entitlements launched by the bank in early 2018. Acting Attorney-General Mathias Cormann said there was “no excuse for a business not to comply with their most basic legal obligations. “Corporate Australia simply must do better here,” he said.

The bank said on Friday that $13.2m had been backpaid to staff and a further $14.9m would be returned from next week. The bank said its review was “substantially complete” and it expected a further $25m would be backpaid by June 30 next year. About 60 per cent of the 41,000 workers are current employees, and staff impacted range from middle managers to frontline 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 backpayments. Where applicable, leave balances have been increased and additional superannuation contributions paid.

CBA chief executive Matt Comyn said on Friday 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.

FSU assistant national secretary Nathan Rees said the union first raised the issue of underpayments in 2017 and some were a result of complex employment arrangements.

Mr Rees said Mr Comyn had taken the issue seriously from the outset and been transparent in the way he dealt with it.

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

Australia’s publicly known worker underpayment bill ­exceeds $500m; 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 comes to ensuring workers are properly paid. He said many employers spent more time on minimising tax than their workplace ­obligations.