The big bank's exposure could be in the hundreds of millions, union says
National Australia Bank is headed to court over what may be the nation’s largest staff underpayment issue. NAB is facing off with the Finance Sector Union in the Federal Court over underpayments that may be worth hundreds of millions of dollars.
FSU state secretary for Queensland Wendy Streets told The Australian that the union had retained senior counsel and intended to lodge Federal Court proceedings. A meeting with the union’s legal advisors will take place later this week to determine the best way to proceed, The Australian reported.
“We had a member meeting six weeks ago and a resolution was passed to brief a barrister,” Streets said. “There is case law which supports both sides, but we believe we are right.”
The dispute stems from NAB’s alleged underpayment of full-time staff. While the bank has already paid $55 million in compensation to current and former employees, those employees were part-time. Streets said the number of full-time employees potentially affected by the underpayment was much greater.
Streets said that if the Federal Court found in FSU’s favour, NAB’s exposure could be in the hundreds of millions of dollars.
Full-time employees at the group three and group four levels at the bank were paid in excess of $100,000 per year. The bank’s positions is that the extra hours in dispute above a 40-hour work week were “reasonable additional work” given the seniority of the affected staff, The Australian reported.
“But most of our members are working 50-60 hours a week, not 40,” Streets said.
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The largest successfully remediated case of underpayment in the financial services industry related to $57 million in underpayments by Commonwealth Bank and was settled in 2019, The Australian reported.
NAB has been conducting a payroll review since December of that year. The review led to a pre-tax provision of $128 million in the second half of 2020. The banks said the provision covered payments dating back to Oct. 1, 2012, and included compensation costs of $110 million and $18 million for the remediation program.
However, there was no provision for full-time staff, The Australian reported.
NAB said in a Tuesday statement that the salaries of its full-time employees were based on modeling against the banking, finance and insurance award and market analysis of equivalent full-time roles.
“Hours od work are not used to formulate their strategy,” NAB said. “NAB continues to engage openly on these issues with the Finance Sector Union and the Fair Work Ombudsman.”
Ryan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.LinkedIn | Email
