More than a decade of underpayments uncovered: a $50 million bill for Westpac

Over 47,000 current and former Westpac employees are to receive back payments as the banking giant repays more than $50 million in underpaid wages, interest, and superannuation. Spanning 11 years, these underpayments highlight the critical need for strong governance and reliable payroll systems in large organisations.

As part of an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO), Westpac has not only rectified past errors but also committed to significant reforms to ensure this doesn’t happen again.

The root causes of the underpayment

The underpayments, which spanned 11 years from January 2014 to February 2025, were attributed to systemic failures in Westpac’s payroll systems, governance processes, and compliance oversight. Issues such as inadequate record-keeping, reliance on manual adjustments, and input errors led to breaches of multiple enterprise agreements. Employees were underpaid for casual loading, minimum wages, allowances, termination payments, and leave entitlements, among other things.

The scale of the issue was vast, with back-payments ranging from less than five dollars to over $56,000 for individual employees. On average, affected staff received approximately $1,000 each. The underpaid employees worked across various roles and entities within the Westpac Group, including brands such as St.George and Bank of Melbourne.

The details of the Enforceable Undertaking

To address these issues and prevent future non-compliance, Westpac has committed to a series of stringent measures under the EU. These include:

• Conducting an independent audit to ensure compliance with workplace laws.
• Establishing a dedicated channel for employees to raise concerns about their entitlements.
• Providing mandatory training on employee entitlements to relevant staff.
• Informing employees about the EU through internal and external communication channels.
• Making an $800,000 contrition payment to the Commonwealth Consolidated Revenue Fund.

Additionally, Westpac has pledged to rectify any future underpayments in full, including interest and superannuation, and to report its findings to the FWO.

A broader call to action for Australia’s large corporates

The Westpac case is part of a larger effort by the FWO to improve compliance among large corporations. Over the past five financial years, the FWO has recovered more than $1.1 billion for workers from large corporations. The case underscores the need for organisations to prioritise compliance and invest in systems that ensure employees receive their lawful entitlements.

For Westpac, the EU represents not just a commitment to rectifying past mistakes but also an opportunity to lead by example in fostering a culture of compliance and accountability.

Strong payroll systems and governance processes take work

Prevention is better than a cure – it’s much less costly, less damaging to reputation, and more efficient to pay employees correctly than to rectify underpayments. Consider investing in an efficient payroll system and seeking advice from Citation Legal if you have concerns that you are underpaying your employees and require privileged legal advice and guidance with respect to remediation and disclosure.

This article was written by Lauren Stariha, Senior Copywriter and Content Specialist and Lisa Qiu, Partner, Citation Legal.