One of Australia's largest banks has been forced to repay more than $50 million to tens of thousands of current and former employees after systematically underpaying them for over a decade.
Systemic Failures Lead to Massive Underpayments
The Fair Work Ombudsman revealed on Friday that Westpac Banking Corporation, which also operates St. George and Bank of Melbourne, had underpaid approximately 47,000 workers between January 2014 and February 2025.
According to the workplace watchdog, affected employees were shortchanged on multiple entitlements including casual loading, minimum wages for ordinary hours, higher duties allowances, weekend penalties, termination payments, and leave payments.
The Ombudsman identified the root cause as "failures in Westpac's systems, governance processes, and compliance oversight." Additional problems included inadequate record-keeping, reliance on systems requiring manual adjustments, and simple input errors.
Repayment Process and Outstanding Funds
Westpac has since paid more than $50 million in back-payments to affected employees, plus an additional $9 million in interest and applicable superannuation.
Individual payments varied dramatically, ranging from under $5 to as much as $56,085 in one extreme case.
However, the bank has been unable to locate 372 former employees who are collectively owed $90,490. This money has been transferred to the Commonwealth of Australia's unclaimed monies account.
Legal Consequences and Remedial Actions
As part of the resolution, Westpac has paid an $800,000 "contrition payment" to the Commonwealth and signed an enforceable undertaking with the Fair Work Ombudsman.
The legally binding agreement requires Westpac to implement several corrective measures:
- Inform its board of compliance matters regularly
- Establish a dedicated channel for employees to raise concerns about entitlements
- Provide comprehensive training on worker monetary entitlements
- Communicate the undertaking to all staff members
Westpac stated it had self-reported the issues to the Ombudsman in 2020 following an internal review of employee entitlements. The bank acknowledged that "a number of employees had unintentionally not been paid correctly."
"Westpac takes its obligations and the entitlements of its employees extremely seriously and sincerely apologises that these errors occurred," the bank said in a statement.
The bank confirmed it had written to and apologised to all impacted current and former employees who could be located, ensuring everyone found has been repaid with interest.
Regulatory Warning to Large Corporations
Fair Work Ombudsman Anna Booth described the outcome as appropriate, noting Westpac had "fully cooperated" with the investigation.
"The matter serves as a warning of the significant long-running problems that can result from an employer failing to have appropriate checks and balances to ensure workplace compliance," Ms Booth stated.
"We expect better from large corporates such as Westpac. They must meet their legal obligations under their own enterprise agreements and underlying awards."
The case highlights ongoing concerns about wage compliance within Australia's corporate sector, particularly among large employers with complex payment systems.
