After $1.67 million in underpayments were uncovered earlier this year across the bank and its network, resulting in an eye watering $10.3 million penalty in addition to the correction of the underpayments with interest, CBA subsidiaries have this week pled guilty to breaching Long Service Leave laws.
Earlier this year a record fine of $10.3 million was handed down to Commonwealth Bank for underpaying 7,400 employees. In addition to the fines CBA was also ordered to pay the legal and administrative costs that the Fair Work Ombudsman incurred in prosecuting the bank.
In the case at the time the FWO alleged in civil proceedings in 2021 that the Commonwealth Bank had “knowingly” underpaid thousands of employees over a five-year period through the use of invalid Individual Flexibility Agreements that did not provide for the employees to be better off overall.
The underpayments to the 7,425 impacted staff over 5 years amounted to $16.44 million, that was backpaid with interest in addition to the fines that were awarded.
This week two CBA subsidiaries have pled guilty to breaches to Long Service Leave laws that resulted in more than $61,000 in underpayments for 9 former staff. The bank has been ordered to pay $48,000 in fines and costs in addition to paying backpay and interest.
In handing down the penalty,Magistrate Kathryn Fawcett outlined that system errors were no excuse for underpayments and that a company with the resources of the Commonwealth Bank should have measures in place to ensure employees are paid their correct entitlements. She did not record a conviction, however, noting the early guilty plea and no prior convictions.
Learnings for all businesses
Wage Inspectorate Victoria Commissioner Robert Hortle in a statement said that it was “disappointing that Commonwealth Bank owned businesses, with their significant HR resources, have underpaid staff at all, let alone to the tune of $1.7 million”.
“Boardrooms across the nation should be asking questions about their long service leave obligations and governance, given some of Australia’s biggest companies have now fallen foul of long service leave laws, including BankWest, CommSec, Optus, Woolworths and Coles,” Hortle said.
Here to Help
Through the year ACAPMA Employment Professionals are available to assist members via employment@acapma.com.au.
This article is general in nature and covers things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by contacting one of ACAPMA Employment Professionals its free for members. ACAPMA membership is affordable at only $860 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts.
Visit: https://acapma.com.au/membership/ to apply for ACAPMA membership.
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