The National Australia Bank (NAB) is set to incur a significant expense of $130 million following an internal audit that revealed instances of employee underpayment. The bank has informed its investors that its operational costs will rise by 4.5 per cent this financial year, which encompasses the expenditures associated with the review and the rectification of the payroll discrepancies. However, the total financial impact remains uncertain as the review process is still ongoing.
The identified payroll issues stem from problems related to job sharing, rosters, and wage and leave entitlements. NAB has begun the process of compensating affected staff and is conducting a broader investigation into payroll-related benefits in reference to current and former employee agreements. The scale of the impact on employees has not yet been disclosed.
NAB’s group executive of people and culture, Sarah White, has expressed regret over the situation, stating that ensuring correct payment to employees is a top priority for the bank. She apologised for the distress caused, asserting that the rectification process has commenced.
This is not the first occurrence of payroll issues at NAB; the bank had previously acknowledged owing $250 million over a two-year period due to similar problems highlighted in a 2019 review. These persistent issues have resurfaced following an ongoing assessment and the implementation of new human resources and payroll systems.
NAB is now collaborating with the Fair Work Ombudsman and the Finance Sector Union (FSU) to address these challenges. FSU national president Wendy Streets condemned the underpayment situation, labelling it systemic wage theft amid ongoing economic hardship for many Australians. She expressed disbelief that a major banking institution like NAB could repeatedly fail to meet its obligations to its staff.
In light of the $130 million loss, NAB did report a robust financial performance, with cash earnings reaching $1.8 billion for the quarter ending in June and a two per cent growth in underlying profit. Additionally, NAB observed increases in both business banking and housing loans. Chief executive Andrew Irvine acknowledged the payroll issues as disappointing but maintained a positive outlook for the bank’s future, emphasising its ability to provide sustainable growth and returns for shareholders.
FSU representatives are slated to meet with NAB later this month, where they will seek firm commitments from the bank to ensure compliance with fair wage practices moving forward.