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Major bank falls prey to $8m underpayment

Payroll calculation errors will now see a major bank compensate a total of $8 million to approximately 8,000 staff.

Business Reporter 03 July 2020
— 1 minute read

A review of Westpac’s payroll and long service leave arrangements has revealed the underpayment of long service leave entitlements.

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The underpayments, caused by calculation errors, will see the major bank paying approximately $8 million, including interest, to around 8,000 people under a new remediation program.

Some overpayments were also made, but Westpac said it will not be asking for that to be repaid.

According to Westpac, in some instances, the wrong rules were inadvertently applied in the payroll system which affected people’s long service leave entitlements.

“We apologise to anyone impacted by these errors and our priority is to make payments as soon as possible,” Alastair Welsh, Westpac Group executive, enterprise services, said.

“For long service leave entitlements, different rules apply to different employees based on their employment history and work arrangements. Regrettably, our system didn’t correctly capture the right methodology every time.”

The bank said it has since engaged the services of a big four accounting firm for assistance on the issue but would not disclose the firm.

“We are committed to putting things right for our people and preventing the issue from [recurring], and we will continue to check our processes to ensure employees receive their correct entitlements,” Mr Welsh said.

“We are putting in place measures to ensure employee long service leave is correctly calculated.”

Major bank falls prey to $8m underpayment
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