Around 7,425 workers were said to be affected by the alleged Fair Work Act contraventions, leading to them being paid less than they were entitled to between October 2015 and December 2020, according to the regulator.
It has launched the proceedings in the Federal Court after an investigation, claiming CBA and CommSec breached clauses of enterprise agreements that require both companies to ensure that staff paid under the agreements and individual flexibility arrangements (IFAs) were better off overall.
CBA had self-disclosed to the Fair Work Ombudsman (FWO) and ASIC in 2019 that it was completing a company-wide review of compliance with its enterprise agreements and that it had identified contraventions.
Staff across various roles had been impacted, but most had been in customer service positions.
CBA supposedly failed to pay $10.05 million to 4,999 employees, while CommSec failed to pay $6.39 million to 2,426 employees, with some of those workers performing work for both companies during the period.
The majority have already been back-paid.
The breaches have met the “serious contraventions” threshold inserted by the 2017 Protecting Vulnerable Workers amendments to the Fair Work Act, because of their systemic nature, the FWO reported.
The FWO has sought orders for penalties against CBA and CommSec, with maximum penalties for each of the alleged serious contraventions spanning up to $660,000 per breach.
The FWO has alleged that CBA and CommSec failed to undertake reconciliations to ensure that employees were not paid less overall compared with the applicable industrial instruments, and make top-up payments for any shortfall.
The regulator has further claimed that CBA and CommSec applied invalid IFAs to some staff, leading to a failure to pay various entitlements, such as minimum rates, overtime, weekend and public holiday rates and some allowances.
Between June 2018 and August 2019, both companies were also said to have misrepresented to some employees that they would be better off overall under their IFAs and that those agreements satisfied their entitlements, in breach of the Fair Work Act.
Fair Work Ombudsman Sandra Parker commented: “Businesses have a responsibility to their employees, customers and the Australian community to get it right by prioritising workplace law compliance, investing in their payroll systems and conducting audits.
“Boards should treat the lawful payment of their employees as a core governance requirement.”
CBA acknowledged the lawsuit in an ASX statement, stating that since it self-reported to the FWO and publicly disclosed the issues in early 2019, it had worked on its systems and processes and had not offered any new IFAs.
“CBA and CommSec acknowledge that any instance of employees not being paid their correct entitlements is unacceptable,” the bank stated.
“A comprehensive remediation program has been underway since early 2018 to identify and address a number of issues dating back to 2010.”
However, CBA reported that it believes no further compensation payments need to be made to employees, once its existing remediation program is complete.
A directions hearing in the Federal Court in Sydney is yet to be scheduled.
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Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.