bhp reports $430 million holiday staff hit
Mining behemoth BHP is the most recent Australian company to be affected by a payroll scandal after it was discovered that 28,500 employees had their leave improperly deducted, leaving them short by almost half a billion dollars.
After a preliminary investigation revealed that leave for rostered employees at its Australian operations had been improperly deducted on public holidays since 2010, leaving them short by $US280 million ($430 million), a significant holiday leave problem had been reported to the Fair Work Ombudsman by the company.
The $213 billion ASX-listed resources giant had about 28,500 employees whose leave entitlements were incorrectly calculated over 13 years.
“A preliminary review suggests that certain rostered employees across our Australian operations have had leave incorrectly deducted on public holidays since 2010,” BHP stated.
“There are approximately 28,500 affected current and former employees with an average of six leave days in total that have been incorrectly deducted from affected employees over these 13 years,” the statement read.
Over the past four years, widespread underpayment by large corporations has increased.
More than half of the record $532 million in backpay that the Fair Work Ombudsman recovered in 2021–2022 came from large corporations that were required to pay nearly $279 million to more than 267,000 workers.
In a recent court case, the Commonwealth Bank of Australia admitted to a systemic, decade-long scandal in which it repeatedly disregarded warnings from human resources and underpaid thousands of employees by more than $16 million.
The wave of underpayments occurs as the Albanese government considers severe $4 million fines for workplace violations and prison time for employers who are found to willfully underpay employees or who fail to address systemic pay issues.
We apologize to any current or former employees who were harmed by these mistakes. This is below the standards we expect at BHP and is not good enough. The miner’s Australian president Geraldine Slattery stated, “We are interested in and working to address these issues as soon as possible.
The Albanese government’s proposed same job, same pay workplace policy came under fire last week from BHP, which claimed it would cost the company up to $1.3 billion annually and jeopardize jobs.
Workplace Relations Minister Tony Burke was prompted to respond to the miner roster issues on Thursday: “Just last week BHP was trying to assure us that their employment practices were impeccable and the government didn’t need to close any loopholes to protect wages.”
“It’s evident that’s not true. Australia can improve its efforts to guarantee fair compensation for workers. In the upcoming months, our legislation will center on that.
The business promised to get in touch with affected current and former workers about remediation as soon as possible and to set up a special hotline and website by Friday to provide information for affected staff.
According to BHP’s investigations, the issue with leave deductions may also affect workers at OZ Minerals, which it recently acquired for $9.6 billion.
The Mining and Energy Union claimed that a Federal Court case that clarified employees’ rights regarding public holidays under the National Employment Standards revealed BHP’s erroneous leave payments.
It was determined in March that businesses cannot automatically treat public holidays as work days without first asking employees to work the days and giving them the option to decline that request in a case brought by the Mining and Energy Union against BHP’s labor hire subsidiary Operations Services.
400 current and former Port Hedland employees, according to BHP, are entitled to additional allowances as a result of a mistake with the “employment entity in their contract.”
According to information currently available, it is predicted that fixing the leave issue and the contracting issue will cost up to $US280 million pre-tax, taking into account expenses such as related superannuation and interest payments.
The investigation, according to BHP, is still ongoing, and it will update investors when it releases its full-year financial results in August.