NAB signs EU for $127m underpayment of workers
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The National Australia Bank (NAB) has entered into an enforceable undertaking (EU) with the Fair Work Ombudsman to complete payments of $127 million, plus $34 million in interest and $8 million in superannuation, to 65,999 underpaid workers, as well as a record contrition payment of $2 million.
In a statement, the Fair Work Ombudsman (FWO) noted that NAB underpaid workers across all Australian states and territories for more than a decade, with back payments to impacted individual workers ranging from less than $5 to more than $87,000, including superannuation and interest, with an average back payment of about $1,934.
The underpayments were first self-reported to the FWO in late 2019, after the banking giant became aware that it had made significant errors in implementing its then-most-recent enterprise agreement.
“Years later, when implementing a new enterprise agreement in 2024, NAB became aware it had failed to identify and rectify its non-compliance issues adequately, which had resulted in it continuing to underpay staff,” FWO said.
According to the ombudsman, the underlying causes of NAB’s underpayments included: deficiencies in governance processes and compliance oversights, inadequate record keeping, legacy payroll technology, and limited investment in specialist capability relevant to payroll operations.
The bank underpaid on a range of entitlements, such as minimum wages for ordinary hours, penalty rate payments, shift loadings and overtime, annual, personal and long-service leave entitlements, and superannuation.
NAB has, the ombudsman said, rectified the large majority of the identified underpayments, which occurred between 2012 and 2026.
The contrition payment, to the Commonwealth Consolidated Revenue Fund, is the largest ever included in an EU executed by the FWO.
The undertaking by NAB, the ombudsman said, also includes terms never before included in an FWO EU, committing it to comprehensive planning and implementation of any future enterprise agreement.
The bank has so far paid at least $155 million to current and former employees, which includes underpaid wages and entitlements exceeding $120 million, interest on top of this of more than $25 million, and more than $8 million in applicable superannuation.
As part of the EU, NAB has committed, among other things, to: the establishment of a steering committee; ensuring any new enterprise agreement is effectively implemented; hiring an independent auditor to ensure compliance of a new payroll platform; implementing worker-voice initiatives; and the delivery of mandatory training for recording additional hours worked.
Fair Work Ombudsman Anna Booth said that an EU was appropriate, as NAB had cooperated with the FWO’s investigation, would fully rectify its underpayments, and had committed to improving its compliance and governance settings and controls.
“NAB’s underpayments highlight the serious, long-running problems that can arise when an employer fails to coordinate key business functions to meet their workplace obligations, including payroll, industrial relations, technology, risk management, audit and legal,” she said.
“It’s particularly disappointing to see these types of large and long-running underpayment issues in such a well-resourced employer, including where it negotiated its own legally enforceable enterprise agreement terms but failed to make sure it had in place fully compliant payroll systems capable of giving effect to those terms before they became operational.
“Complying with workplace laws is an organisation-wide responsibility, and planning for compliance with new enterprise agreement terms should begin early to ensure workers receive what they are owed.
“We welcome however NAB’s extended efforts and reviews across many years to ensure it finds and rectifies all underpayments. The Enforceable Undertaking ensures comprehensive remediation – covering timeframes well outside statutory limits – as well as stronger accountability and sustained future compliance.
“The Undertaking requires NAB to address the underlying causes of its failures and to strengthen its compliance across its governance systems. These commitments include, for the first time in a FWO EU, early planning to implement any new enterprise agreement, through a steering committee chaired by NAB’s Group Executive People and Culture.
“In addition, the Undertaking requires stronger executive oversight and reporting of employee complaints and non-compliance, supported by improved systems and processes to identify any trends and emerging areas of non-compliance revealed within employee complaint and reporting channels, before they become systemic.
“Improving compliance among large corporates is a Fair Work Ombudsman priority. We’ve helped recover more than $1.2 billion for workers from large corporates over the past five financial years.”
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