Nearly 47,000 workers just received long-overdue payments. The details reveal how deep the problems ran.
Westpac Banking Corporation has finalised a massive remediation programme that will see the major bank hand over more than $59 million to current and former staff underpaid over an 11-year period. The settlement includes signing an enforceable undertaking with the Fair Work Ombudsman and an $800,000 contrition payment.
The scope of the Westpac underpayment settlement is staggering. Between January 2014 and February 2025, systemic failures across payroll systems left thousands of employees short-changed on their lawful entitlements.
The Numbers Behind the Westpac underpayment Scandal
The Fair Work Ombudsman confirmed Westpac has paid out:
- $50.26 million in back wages to nearly 47,000 staff
- $9 million in interest and superannuation
- $90,490 to the Commonwealth unclaimed monies account for 372 former employees who could not be located
- Individual payments ranging from less than $5 to $56,085
- Average back-payment of approximately $1,000 per employee
More than 10,585 current employees also had their leave balances corrected as part of the remediation efforts.
Westpac has apologised to affected staff following the multi-million dollar underpayment scandal
What Went Wrong at Westpac
Fair Work Ombudsman Anna Booth described the situation as a result of “failures in Westpac’s systems, governance processes, and compliance oversight.”
The investigation uncovered multiple breaches across Westpac enterprise agreements, affecting full-time, part-time, and casual employees. Staff were underpaid on:
- Casual loading and minimum wages for ordinary hours
- Higher duties allowances and weekend penalty rates
- Termination payments and leave entitlements
- Superannuation contributions
- Incorrect grade and classification levels
- Meal allowances
The most common problem was the incorrect deduction of leave and time off in lieu of public holidays. This single issue affected more than 10,000 current employees who needed their leave balances adjusted.
Record-keeping shortcomings, input errors, and over-reliance on systems requiring manual adjustments compounded the problems across multiple years.
The Enforceable Undertaking
The Westpac enforceable undertaking signed with the Fair Work Ombudsman includes strict compliance measures:
- Commission independent audits to check workplace law compliance
- Establish a dedicated channel for employees to raise entitlement concerns
- Provide mandatory training on worker entitlements for relevant staff
- Ensure the board receives appropriate compliance reporting
- Consult regularly with employees and the Finance Sector Union
- Report findings back to the Fair Work Ombudsman
“Under the Enforceable Undertaking, it has committed to rectifying any future underpayments it identifies in full, plus interest and superannuation, and implementing stringent measures to ensure all staff are paid correctly in future,” Booth stated.
The bank must also pay an $800,000 contrition payment to the Commonwealth Consolidated Revenue Fund.
Westpac’s Response
A Westpac spokesperson told media outlets the bank uncovered the issues during its own internal review in 2020.
“When we found them, we immediately moved to put things right,” the spokesperson said. “We’re genuinely sorry this happened. Paying our people correctly is a fundamental obligation which we take seriously and we apologise again to all affected employees.”
The bank confirmed it has invested significantly in updating systems and processes to better manage entitlements. Notably, Westpac did not ask any employees who had been overpaid to return money.
The remediation programme extended to employees across multiple Westpac entities, including Asgard Wealth Solutions Ltd, Westpac Financial Consultants Pty Limited, Westpac General Insurance Services Limited, BT Financial Group Pty Limited, and Qvalent Pty Ltd.
A Pattern Across Australian Banking
This isn’t Westpac’s first brush with underpayment issues. The bank previously signed an enforceable undertaking in 2021 to back-pay more than 6,400 employees a total of $6 million over underpaid long-service leave entitlements.
The banking sector has faced mounting scrutiny over workplace compliance. In August, NAB flagged a $130 million hit after revealing wage and entitlement underpayments. ANZ was hit with a record $240 million fine earlier this year for separate misconduct affecting millions of customers.
Commonwealth Bank has also faced regulatory action, though it has reported strong financial performance in FY25.
The Australian Securities and Investments Commission has been cracking down on compliance failures across the financial sector, with record penalties imposed on major institutions.
What the Ombudsman Says
Fair Work Ombudsman Anna Booth delivered a pointed warning to other large employers.
“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,” she said.
“We expect better from large corporates such as Westpac. They must meet their legal obligations under their own enterprise agreements and underlying awards.”
Booth noted the Fair Work Ombudsman has helped recover more than $1.1 billion for workers from large corporates over the last five financial years.
“We cannot overstate the importance of sound governance and proper board oversight of employee wage and entitlement compliance,” she continued. “I commend Westpac for the commitments it has made to strengthening its processes on worker voice and executive governance.”
Fair Work Ombudsman has been investigating Westpac’s payroll practices since December 2020
Timeline of Events
The underpayments and investigation unfolded over several years:
- January 2014 – February 2025: Period during which underpayments occurred
- 2020: Westpac conducted internal review and discovered issues
- December 2020: Westpac self-reported to Fair Work Ombudsman
- November 2025: Final settlement announced, enforceable undertaking signed
What This Means for Workers
The case demonstrates that even Australia’s largest financial institutions face consequences when they fail to meet workplace obligations.
Workers can check if unpaid wages are being held for them through the Commonwealth of Australia unclaimed monies account.
Booth praised Westpac’s cooperation and commitment to rectifying the issues, noting the bank made full back-payments extending well beyond the six-year liability limitation period.
“Other large corporate employers should take note of the positive changes that Westpac has made as part of this EU,” she said. “A proper investment in meeting employer obligations will see workers receive their legal entitlements, at the same time as reducing the risks and costs for the business associated with non-compliance.”
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Broader Implications
The Westpac underpayment settlement serves as a stark reminder that workplace compliance cannot be treated as an afterthought, even by institutions with substantial resources and sophisticated systems.
The banking sector’s ongoing compliance struggles have raised questions about corporate governance, risk management, and the adequacy of internal controls at major financial institutions.
With increased regulatory scrutiny and record penalties becoming more common, the cost of non-compliance continues to rise for large corporates operating in Australia’s financial services sector.
