Firm also enters Enforceable Undertaking with the FWO
Finance and insurance firm Suncorp has paid back $32 million that it owed to over 15,800 employees who were underpaid for eight years, according to the Fair Work Ombudsman (FWO) on Friday.
Suncorp paid back former and current employees - including advisors, assessors, customer support staff, technical staff, team leaders, and managers - who belonged to the insurance arm of Suncorp Staff Pty Ltd, Suncorp Insurance Services Limited, and Australian Associated Motor Insurers Pty Limited.
These employees were underpaid between May 2014 and March 2022 of their entitlements including overtime, shift loadings, weekend penalties, annual leave loading, public holiday loadings, minimum rate of pay, long service leave, redundancy, payment in lieu of notice, meal allowances, and superannuation.
According to the FWO, Suncorp has paid back about $26 million in wages and entitlements, $4.5 million in interest, and $1.4 million in superannuation.
Impacted employees received between $1 to $54,951, according to the FWO, with the average underpayment of $1,687 per employee.
So far, over 99% of the $32 million have been back paid, according to FWO, and Suncorp has vowed to pay the remaining underpayments by September.
‘Inconsistent application’ behind underpayments
The underpayment stems from the firm's "inconsistent application of the term 'Rostered employee,'" the FWO said.
It was also due to the misunderstandings of appropriate entitlements under a self-service process, where employees had to claim on their own extra entitlements above their ordinary hours.
"This matter demonstrates the importance of employers placing a high priority on compliance, including with all clauses in their Enterprise Agreements," said Fair Work Ombudsman Sandra Parker in a media release.
"Suncorp's incorrect application of particular clauses has led to underpayment of basic employee entitlements and a large back-payment bill."
The underpayments were first discovered after the company carried out an internal review into specific pay and leave practices and its rostering systems. It later self-reported to the FWO in 2020.
Suncorp to pay contrition payment
Meanwhile, Suncorp also agreed to pay $520,000 as contrition payment to the Commonwealth Consolidated Revenue Fund.
This is part of the Enforceable Undertaking (EU) with the FWO that Suncorp has agreed to. According to Parker, the EU was appropriate because the firm cooperated and made a commitment to rectify the underpayments.
"Under the Enforceable Undertaking, Suncorp has committed to stringent measures to ensure its employee are paid correctly in the future," Parker said. "These measures include engaging, at the company's own cost, two independent annual audits to assess its compliance with workplace laws."
In addition, Suncorp should also operate an employee information channel for 60 days and provide appropriate training to relevant staff. It is also tasked to provide a signed letter of assurance to the FWO from the Group Executive to confirm their compliance.
Suncorp is among the list of major employers who were recently got caught in controversy for underpaying staff by millions.
Mining giant BHP admitted to underpaying employees approximately $430 million, while the Common Wealth Bank of Australia admitted to underpaying over $16 million.
They join the ranks of Australia's major underpayment cases, which include Coles Supermarkets and Woolworths.
The government is currently considering imposing higher penalties of up to $4 million for cases of serious wage theft, as proposed in its second tranche of workplace reforms.
