Commonwealth Bank of Australia entities underpaid 529 current and former staff over $1.67 million in long service leave entitlements. The underpayment was revealed by the bank today in the Magistrates' Court of Victoria, where two of those entities, CommSec and BankWest, pleaded guilty to breaking Victoria's long service leave laws.
Wage Inspectorate Victoria launched an investigation into the Commonwealth Bank following a broad compliance audit focused on the finance sector. The audit process uncovered the $1.67 million in underpayments, which occurred between January 2012 and January 2021.
The Wage Inspectorate subsequently charged CommSec and BankWest, with long service leave offences. The charges represent a sample of the offending conduct, related to underpayment of workers whose employment had ended, and that were within the statute of limitations.
Today, in the Melbourne Magistrates' Court:
- CommSec pleaded guilty to failing to pay more than $38,334 in long service leave entitlements to 8 former employees, ranging from $1,113 to $10,321.
- BankWest pleaded guilty to failing to pay more than $22,847 in long service leave entitlements to 9 former employees, ranging from $521 to $9,957.
CommSec and BankWest were each fined $18,000 and ordered to pay combined costs of $12,000.
In sentencing, her Honour Magistrate Kathryn Fawcett noted that system errors are not an excuse for underpayment and that a company with the resources of the Commonwealth Bank should have measures in place to ensure employees are paid their correct entitlements.
Her Honour did not record a conviction, noting the early guilty plea and no prior convictions. If not for the early guilty plea, her Honour would have imposed a combined fine of $80,000. Quotes attributable to Robert Hortle, Commissioner of Wage Inspectorate Victoria
"The Wage Inspectorate was set up to ensure Victorian's received their hard-earned entitlements and today's outcome shows that's exactly what we're doing."
"$1.7 million of hard-earned entitlements is back in the pockets of Victorian workers where it belongs, and where it will make a significant difference to their lives."
"It's 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. For some, this meant less money in their pocket, while others were denied the opportunity to take hard-earned leave."
"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."
Background
The Long Service Leave Act 2018 is a Victorian law that provides long service leave for employees who have worked continuously with one employer for at least 7 years. It applies to work that is full time, part time, casual, seasonal and fixed term.
After at least 7 years' continuous employment with one employer, an employee is entitled to take their long service leave and be paid any unused long service leave entitlement on their final day of employment.
The charges related to underpayment of workers whose employment had ended, and that were within the statute of limitations. The under accrual of long service leave to current staff does not represent a contravention of the Long Service Leave Act 2018 until such time as it is due to be paid.
Most Victorian employees will be covered by the Act, unless they have a long service leave entitlement from another source, such as a registered agreement, award or another law.
A prosecution is the Wage Inspectorate's most serious compliance tool and decisions to take legal action are made in line with its Compliance and Enforcement Policy.
