In what may be the largest underpayment case in Australian history, the National Australia Bank (NAB) will face legal action for alleged unpaid wages lodged by The Finance Sector Union (FSU) in the Federal Court.
The outcome of this case could have ramifications for all employers who pay salaries where the employee is covered by an Award and regularly works hours more than 40 hours a week.
If the NAB is found to have underpaid employees on an annual salary where those employees have worked more than 40 hours per week, they could be found liable in the Federal Court to have underpaid employees hundreds of millions of dollars.
So… you can see the Federal Court decision in this case may very well impact you where you have employees with terms and conditions that are similar.
With regards to the current NAB case, the dispute stems from NAB’s alleged underpayment of full-time staff. NAB has already paid $55 million in compensation to current and former part-time employees.
In this claim, the NAB’s Award-based full-time employees on a salary are allegedly regularly working 50 to 60 hours per week. These employees are group three and group four levels across the bank and paid in excess of $100,000 a year. The bank’s position is that the extra hours in dispute above a 40-hour week amounted to “reasonable additional work” given the seniority of the affected people.
Whilst the case is still in progress it is important to note The Fair Work Commission has provisionally decided the outer overtime limit for the Restaurant Award and the Hospitality Award is 10 hours.
If NAB is found liable, how could this impact your business?
Should the Court rule in the FSU’s favour, NAB will be liable for underpayments which may be further compounded by employee’s past and present, length of service and who worked more 40 hours.
For example, if your business has an employee who receives an annualised salary, is covered by an Award and the employee regularly works an average of 55 hours per week; then your business may be at risk of a claim or be required to back pay the staff member should the FSU claim succeed.
This could be further compounded by the number of employees (current and past) your business employs under this scenario.
As we said earlier in this blog, if your business has employees receiving an annual salary, where the employee regularly works over and above 40 hours per week, you may be at risk.
What can your business do now to avoid inadvertently underpaying employees?
Akyra advice to all clients is to conduct the salary reviews on a quarterly basis as this will allow you to manage any anomalies as soon as they arise and ensure you are not liable for a potentially large back-pay that must be paid out to an employee in a lump sum.
An outcome from the salary review may result in further workforce insights – e.g.
- Does the employment agreement require amending so it is compliant with the relevant Award
- If an employee is working substantial overtime, is it a productivity issue, personnel issue or is more adequate staffing on a full time or casual basis potentially required.
NEED MORE INFORMATION?
Akyra can help your business to assist and support all your questions and concerns related to wage obligations. Please contact Akyra on 07 3204 8830 or book a free 30-minute consultation for an obligation-free conversation.
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.