Commonwealth Bank has underpaid about 8000 staff after its human resources technology systems failed to accurately calculate and process entitlements, forcing the bank to repay millions of dollars to current and former employees.
The Finance Sector Union said it was notified by CBA about the issue, which the union is describing as a “blunder” relating to CBA’s “antiquated computer systems”. CBA says it replaced the offending HR system last year and has apologised to affected staff.
“This is a major stuff-up by the CBA and hard-working bank staff deserve an apology and a commitment from the CBA’s chair, Catherine Livingstone, and CEO Matt Comyn that this kind of pay bungle won’t happen again,” said FSU national secretary Julia Angrisano.
Once compensation is repaid, including interest and additional superannuation payments, Ms Angrisano said CBA and its Bankwest subsidiary may have to return between $10 million and $15 million. CBA said the amount – at least in the initial phase – would be less.
“We have begun remediation and the first tranche will involve approximately 8000 current and former employees receiving back pay totalling $4.8 million, including interest,” said CBA’s executive general manager of group people services, Andrew Culleton.
“We regret these errors and apologise. Our people have worked, and continue to work hard to support our customers, and I want to assure them that we’re fixing our systems and processes so this doesn’t happen again.
“All impacted current and former employees with entitlements owing will receive back pay with interest and their leave balances adjusted where applicable.”
Ms Angrisano said the errors should not have happened and would justifiably leave the bank’s customers wondering whether their bank accounts were being properly managed.
But Mr Culleton rejected any link between the HR systems and the banks’ systems that handle customer information.
“These errors were identified as part of our review and relate to our previous HR and payroll systems, which were replaced in 2018. There is no impact to customer systems,” he said.
It is understood CBA has notified the union of other, separate issues relating to staff payments, including that some employees had been paid at a rate below the industrial award.
CBA’s HR systems have had previous hiccups. In 2017, the bank apologised for failing to pay more than 7000 part-time staff their full superannuation entitlements, an error that cost it $22 million, according to the union.
CBA systems also came under fire during banking royal commission hearings. For example, counsel assisting, Michael Hodge, QC, at one point described systems at Commonwealth Financial Planning as being “so hopeless that it had no idea of what was going on”.
At its most recent half-year results in February, CBA said risk and compliance-related investment spending rose 78 per cent to $432 million from the previous corresponding half.
Signalling an increasingly acrimonious relationship between the union and CBA, Ms Angrisano said the bank had provided a “lame” response to her letter last Friday seeking more information on job cuts. That followed reports CBA planned to chop its workforce by 20 per cent, or 10,000 people, and close 300 branches, numbers the bank described as “misleading and unnecessarily alarming”.
CBA’s response was filled with “HR double-speak and we are very concerned that the CBA is putting profits before people, planning a wholesale staff bloodbath which will reduce the branch network and put customer service last”, Ms Angrisano said.
Highlighting the prospect of ongoing industrial relations tension, the union described CBA’s employment practices as being “clearly broken”.
“Decades of deliberate anti-worker strategies are catching up with the CBA. Their use of individual contracts to avoid collective conditions is a tactic the CBA uses to divide and rule,” she said.