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The Fair Work Ombudsman (FWO) says the bank knew about the wage shortfalls so the offence qualifies as a serious contravention of the Fair Work Act 2009.
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CBA faces heavy fines after admitting years of staff underpayments
20 April 2023
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10 minute read
The Commonwealth Bank of Australia (CBA) could face significant fines for knowingly short-changing staff despite back payments of $16.1 million to 7,402 employees.
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In a statement of agreed facts and admissions filed by the Fair Work Ombudsman on 10 March, the FWO alleged CBA failed to pay $9.74 million to 5,014 employees while CommSec failed to pay $6.36 million to 2,422 employees.
A Commonwealth Bank spokesman admitted to knowingly making underpayments to staff dating back more than a decade, The Australian Financial Review reported yesterday.
“A Commonwealth Bank spokesman said it had made ‘certain admissions’ in relation to the FWO’s legal action and ‘we acknowledge that any instance of employees not being paid their correct entitlements is unacceptable’,” the Financial Review reported.
If found guilty of serious contraventions, CBA and CommSec could face penalties of up to $666,000 per breach.
The 10 March filing saw the FWO retract some of its allegations as well as assert that the two entities knowingly failed to comply with some of the “better off overall obligations” under the enterprise agreements, which it said could be classed as serious contraventions of the Fair Work Act 2009 (FW Act).
“The FWO no longer alleges that CommSec misrepresented to some employees that they would each be better off overall under their individual flexibility arrangements and that those agreements satisfied their entitlements,” the FWO said regarding the statement.”
However, the FWO said the underpayments amounted to “serious contraventions” of the FW Act.
“In respect of some of the contraventions, the FWO alleges that CBA and CommSec knowingly failed to comply with some of their ‘better off overall obligations’ under their enterprise agreements and that these breaches meet the ‘serious contraventions’ threshold inserted by the 2017 amendments to the Fair Work Act, because of the systematic nature of the alleged conduct.”
The FWO commenced proceedings in 2021 in the federal court against CBA and CommSec for failing to pay 7,425 workers $16.44 million.
The bank had disclosed the underpayments to the regulator after a company-wide review of compliance and enterprise agreements.
The investigation resulted in the FWO alleging that both entities had breached clauses of their enterprise agreements which required both to ensure that staff paid under the agreements and individual flexibility arrangements were better off overall.
The FWO alleged that those paid under individual flexibility arrangements had not been checked by CBA and CommSec and they failed to ensure they were better off overall than if they had been paid under enterprise agreements between October 2015 to June 2020.
It also alleged that the entities applied invalid individual flexibility arrangements to some staff which failed to pay various entitlements including minimum rates, overtime and weekend and public holiday penalty rates.
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