In the latest of a series of significant underpayments from large businesses with sophisticated payroll systems and internal expertise, Bupa has advised the Fair Work Ombudsman of the underpayments, which impact more than a third of the workforce and total more than $75 million plus superannuation. The underpayments were caused by “deficiencies in internal systems and processes” and were identified by a recent audit of the system. This weeks HR Highlight explores this and other recent underpayments, the myth of simplicity and what every business should do now.

The full extent of the underpayments is not yet known as Bupa has not yet concluded the detailed pay review that was launched following the systemic and data issues that were identified by the audit.  The pay review is expected to conclude in March 2022 and back payments are expected to commence from that point to the more than 18,000 employees currently known to be impacted, with past and current staff encouraged to visit Bupas pay review website for more information;

In speaking about the underpayments Bupa Asia Pacific CEO Hisham El-Ansary noted that “we are strengthening and simplifying our internal processes and systems, including putting in place additional auditing and assurance mechanisms to ensure we are doing all we can to prevent mistakes like this from happening again”.

Broader context

The Bupa underpayments are announced in the context of years of stunningly massive underpayments from large sophisticated businesses as front page news (like Coles and Woolworths), but also comes as less well known instances of underpayments have resulted in declaration to the Fair Work Ombudsman, including;

  • $5,731,116 in under and unpaid Long Service Leave to 6,407 employees plus superannuation and interest from Westpac
  • $5,421,193  in unpaid and underpaid base rate due to misclassification of staff and underpaid and unpaid overtime due to misapplication of its enterprise agreement impacting to 2,381 staff from Emirates Leisure Retail (Australia)
  • $4,500,000 in unpaid and underpaid wages to 36,000 staff due to incorrect award being applied to staff and a lack of rigour in understanding and applying the award conditions when the correct award was applied, from Hudson
  • $750,000 underpaid to 336 staff over 6 years from the Paraplegic and Quadriplegic Association of NSW

Learnings for all businesses

Employment compliance can be complicated and is about more than an accounting exercise, it is about more than just the figures in a payroll system, it includes a pressing need to understand not only the bordered employment compliance legal framework but also the nuanced and detailed interaction of the framework with the employment instruments (such as the Awards) as well as continuous scanning and absorption of developing case law, Award interpretation and knowledge of the limitations of accounting and payroll software when applied in a real world setting.

“Regardless of how well speced-up an accounting system is, it is still designed, implemented and utilised by people, and any system with people in it can be imperfect, so continuous auditing and review is required to ensure the system itself is operating compliantly and is applied correctly” explains ACAPMAs Elisha Radwanowski.

“Anyone who says ‘payroll is easy’ and ‘all underpayments are intentional’ is sadly being reductive and failing to recognise the reality which is this; large sophisticated businesses, with teams of lawyers, accountants and HR professionals have, in full confidence of the compliant nature of their systems, run afoul of complexity and the compounding nature of minor misunderstandings,  misapplications or systems malfunctions and mis-designs.  The complexity is real, and it is felt even more keenly in small and medium businesses, where these teams of professionals are not only not part of the business, but the Director is ‘wearing all of the hats’ and is processing payroll in between serving customers, cleaning the floors, lodging BAS payments, ordering stock and managing staff” continued Elisha.

“The complexity is real and MUST be acknowledged in order for it to be catered for and properly addressed.  Pretending that employment compliance is simple exacerbates the problem by encouraging a level of self confidence and ‘set and forget’ that compounds the issues complexity brings”  argues Elisha.

“Even in a simple setting mistakes happen, this reality of complexity and inevitable error MUST be recognised and planned for.  All businesses should be clear in acknowledging the complex and evolving nature of employment compliance and should be participating in programs to watch for and identify issues and correct them sooner rather than later” adds Elisha.

“Even small businesses, particularly small businesses, should be utilising tools like independent audits or health checks, training sessions and information services on a regular basis.  I am clearly biased, working for one myself, but industry associations are a great place for small businesses to access these resources.  Not only is supporting members in the challenge of employment compliance the primary reason most industry associations exist, it is also important to note that many ‘health checks’ that are provided by software or consultancy firms are a sales tool that can often lack the nuanced understanding of how complex Awards are applied in a particular industry”

“The Fair Work Ombudsman has said it loudly and often, and she is absolutely correct, there is no place for ‘set and forget’ employment compliance is an ongoing task for every business, of every size.  The first part of that task is acknowledging that getting it right is hard, that there is complexity and mistakes will be made.  The second part is seeking help, advice and independent professional review – to catch issues before they become mistakes and to correct mistakes before they become massive.  The third task is to do it again.  Employment compliance is a cycle and it must be continual.  You need to be addressing employment compliance every day there are people working in the business” concluded Elisha.

ACAPMA Assisted Compliance Audits

ACAPMA provides employment and DG safety audits that are designed to not only identify issues, but provide professional tailored resources, templates and systems to address those issues.  Priced at $495 inc GST per site the ACAPMA Assisted Compliance Audits are more than a health check they are a guided process from impartial industry experts, a safe place to explore and correct current operation leaving the business with up to date information, systems and templates now and an ongoing review schedule.

2021/2022 ACAPMA Assisted Compliance Audits are underway now, with the next intake set for February 2022, enquiries to

Here to Help

 HR Highlights are things to consider, implement and watch out for in your business.  They are provided as general information for you to consider and do not constitute advice.  You should seek further advice on your situation by contacting your legal advisor.  ACAPMA members can access resources and receive advice, guidance and support from the ACAPMA employment professionals via , it is free for members.  ACAPMA Membership delivers this and more benefits, see;  for more information.

Elisha Radwanowski BCom(HRM&IR