Fair Work Ombudsman flags legacy payroll systems and enterprise agreement errors as NAB backpays nearly 66,000 workers
National Australia Bank (NAB) has entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO) after underpaying 65,999 workers. The underpayments total $127 million over more than a decade, the regulator announced on 12 November 2026.
An Enforceable Undertaking is a formal, court-enforceable agreement. In it, an employer commits to fixing breaches and improving compliance instead of facing litigation. Under the deal, NAB is completing back-payments of $127 million, plus $34 million in interest and $8 million in superannuation. It will also make a $2 million contrition payment to the Commonwealth Consolidated Revenue Fund. That is the largest contrition payment ever included in an FWO undertaking.
The underpayments occurred between 2012 and 2026. They affected casual, part-time and full-time staff in every state and territory, from customer support advisors and home lending bankers to branch managers and project managers.
NAB first self-reported to the FWO in late 2019, after errors in implementing its then-current enterprise agreement. When it rolled out a new agreement in 2024, the bank found it had not adequately fixed the problems and was still underpaying staff.
The FWO pointed to weak governance and compliance oversight, poor record-keeping, legacy payroll technology and limited specialist payroll capability. Its own agreement required NAB to run reconciliation checks against the Banking, Finance and Insurance Award 2010, and it failed to do so.
Individual back-payments range from less than $5 to more than $87,000, with an average of about $1,934. NAB has paid at least $155 million so far.
Fair Work Ombudsman Anna Booth said the case was a warning for large employers.
“It’s particularly disappointing to see these types of large and long-running underpayment issues in such a well-resourced employer, including where it negotiated its own legally enforceable enterprise agreement terms but failed to make sure it had in place fully compliant payroll systems capable of giving effect to those terms before they became operational,” Booth said.
“Complying with workplace laws is an organisation-wide responsibility, and planning for compliance with new enterprise agreement terms should begin early to ensure workers receive what they are owed.”
For the first time in an FWO undertaking, the employer must set up a steering committee to plan and implement any new enterprise agreement. At NAB, it will be chaired by the group executive people and culture. Other commitments include:
- an independent audit of a new payroll platform
- better tracking of employee complaints
- staff forums
- mandatory training on recording additional hours
- regular compliance reporting to the Board.
Why large employers keep getting payroll wrong
NAB is far from alone. The Fair Work Ombudsman recovered $453 million in unpaid wages and entitlements for more than 181,000 workers in 2025–26, and $217.3 million of that came from large corporate employers. In November 2025, Westpac signed its own undertaking and back-paid more than $50 million to almost 47,000 current and former staff, after getting their pay wrong for 11 years.
Brett Cowan, founder and CEO of the Australian payroll technology company Payroll Standard, said payroll errors are a management problem rather than a technology one.
“Just because you’re paying people on time doesn’t mean you’re paying correctly,” Cowan said.
“Companies have the best of intentions to pay correctly but ask rostering, HR, the payroll system and the employee what a single shift should pay, and in many businesses, you’ll get a different figure from each.”
According to Cowan, payroll systems can repeat the same errors for years when the pay rules behind them are incomplete or out of date. He said that makes payroll a matter for the board.
“It’s a business risk, and it belongs on the board’s agenda and if a company can’t explain how its payroll calculations work, its board should be asking why.”
What it means for HR leaders
Booth said NAB’s case shows the “serious, long-running problems that can arise when an employer fails to coordinate key business functions to meet their workplace obligations, including payroll, industrial relations, technology, risk management, audit and legal.”
The FWO said improving compliance among large corporates is a priority. It has helped recover more than $1.2 billion for workers from large corporates over the past five financial years.
