CBA underpaid employees by millions – Fair Work Ombudsman

The major bank is facing Federal Court proceedings for allegedly shorting thousands of staff members

CBA underpaid employees by millions – Fair Work Ombudsman

Commonwealth Bank and its share-trading arm are facing Federal Court proceedings for allegedly underpaying staff by millions of dollars.

The Fair Work Ombudsman announced Monday that it had instituted legal proceedings against CBA and CommSec, accusing them of failing to pay $16.44 million to 7,425 employees, The Australian reported. The investigation was launched after CBA disclosed to the FWO and the Australian Securities Exchange in 2019 that it had found contraventions during a compliance review of its enterprise agreements since 2010.

The FWO alleged that CBA and CommSec violated clauses of their enterprise agreements requiring them to ensure that staff paid under the agreements and individual flexibility arrangements were better off overall, The Australian reported.

The FWO alleged that the companies failed to undertake reconciliations to make sure employees were being paid correctly and make top-up payments for any shortfall. That allegedly led to employees being paid less than they were entitled to between October 2015 and December 2020, The Australian reported.

Most of the affected employees were in customer service roles and have already been back-paid. CBA said that it began a remediation program in 2018 before it reported the issue.

“CBA and CommSec acknowledge that any instance of employees not being paid their correct entitlements is unacceptable,” the bank told The Australian. “Systems and processes have been strengthened and CBA and CommSec have not offered any new individual flexibility arrangements for more than two years.”

The systematic nature of the alleged breaches mean they meet the “serious contraventions” threshold under the Fair Work Act, according to the FWO. Each company could face maximum penalties of $666,000 per breach.

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The agency also alleged that between June 2018 and August 2019, CBA and CommSec misrepresented to some employees that they would be better off overall under their individual flexibility arrangements, and that those arrangements satisfied their entitlements, The Australian reported. Those alleged contraventions could result in penalties of up to $66,600 per breach.

“Businesses have a responsibility to their employees, customers and the Australian community to get it right by prioritising workplace law compliance, investing in their payroll systems and conducting audits,” Fair Work Ombudsman Sandra Parker said. “Boards should treat the lawful payment of their employees as a core governance requirement.”

A Federal Court hearing on the matter has not yet been scheduled, The Australian reported.

“CBA and CommSec will continue to engage constructively with the FWO to seek to resolve these proceedings,” the bank said. “CBA believes no further compensation payments will need to be made to employees who are the subject of these proceedings once the existing payments are completed.”