Westpac backpays $6 million owed to 6400 workers

Westpac will make a one-off ‘contrition payment’, apologise to staff and publicly detail its contraventions.

Westpac is backpaying thousands of employees. Picture: NCA NewsWire / John Gass

Westpac is backpaying $6 million owed to 6400 former and current employees after underpaying their long service entitlements over seven years.

Under an enforceable undertaking reached with the Fair Work Ombudsman, Westpac will make a $343,866 “contrition payment” to the Commonwealth, formally apologise to staff and publish social media and newspaper notices detailing its contraventions.

The individual underpayments, which were as high as $75,000, occurred across Westpac’s portfolio of financial services brands, including Westpac Bank and St George Bank, between 2014 and 2021.

The $6 million in backpay includes interest and superannuation. Most of the workers have been repaid, with the bank required to repay remaining amounts by November 30.

Westpac self-reported to the Fair Work Ombudsman in April 2020 that it had underpaid the long service leave entitlements of employees across Australia after identifying underpayments during an internal review.

In July 2020, the bank had estimated that about 8000 former and current workers had been underpaid $8 million in long service leave entitlements, including interest.

Westpac said payroll system errors resulted in the bank failing to correctly take into account employees’ overtime work, average weekly hours, bonuses, commissions and sick leave when determining how much long service leave to accrue to employees.

In some instances, Westpac also placed some employees on the wrong long service leave plan and did not properly apply entitlements under the National Employment Standards.

Affected employees were located across all states and territories and worked in a variety of roles, ranging from bank tellers to managers and corporate staff.

Fair Work Ombudsman Sandra Parker said an enforceable undertaking was an appropriate outcome as the bank had co-operated and demonstrated a strong commitment to rectifying underpayments.

“Under the enforceable undertaking, Westpac has committed to stringent measures to comply with the law and protect its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance each year for the next two years,” Ms Parker said.

“This matter serves as a warning to all large employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale,” she said.

In a statement on Tuesday, Westpac said it reported to the FWO in 2020 that it had not properly accrued or paid long service leave entitlements to all its employees.

“Westpac apologises sincerely that this error has occurred and has repaid all long service leave underpayments to the current and former employees that it could locate, with interest,” a spokesperson said.

“Westpac has now entered into an enforceable undertaking with the FWO, where it has committed to undertaking a number of activities to ensure its ongoing compliance, such as conducting independent audits.”