Suncorp, the Australian financial services company, has reached an agreement with the Fair Work Ombudsman to compensate its employees with approximately $32m, including interest and superannuation. Suncorp self-reported the breaches to the FWO in 2020, relating to underpayments within its insurance division, and has now entered into an enforceable undertaking to rectify the situation.

The FWO's investigation revealed that more than 15,800 employees at Suncorp were underpaid their minimum wages between May 2014 and March 2022 because of an incorrect interpretation of the term 'rostered employee' in the company's enterprise agreements. This inconsistent use of the term resulted in a range of entitlements being underpaid, including overtime, shift loadings, weekend penalties, annual leave loading, public holiday loadings, long service leave, redundancy, and superannuation.

READ MORE | BHP faces scrutiny over $430m underpayment

The affected employees, both current and former, held various positions within Suncorp's insurance arm, including advisors, assessors, customer support staff, team leaders, and managers. The individual underpayments varied between $1 and $54,951, with an average underpayment of $1,687 per affected employee.

Suncorp has already taken steps to address the issue, having paid back over 99% of the owed amount, which includes around $26m in wages and entitlements, $4.5m in interest, and $1.4m in superannuation. However, the FWO has emphasised that the remaining outstanding underpayments must be rectified by September 2023.

As part of the enforceable undertaking, Suncorp has also agreed to make a contrition payment of $520,000 to the Commonwealth Consolidated Revenue Fund. Additionally, the company will establish an employee information channel for 60 days, provide appropriate training to staff, and submit a signed letter of assurance to the FWO from their group executive, confirming their compliance with workplace laws.

READ MORE | Temasek cuts compensation of senior management

Fair Work Ombudsman Sandra Parker acknowledged Suncorp's commitment to addressing the underpayments and deemed the enforceable undertaking an appropriate resolution. Parker emphasised the importance of employers prioritising compliance with all clauses in their enterprise agreements, citing Suncorp's incorrect application of specific clauses as the root cause of the underpayment issue and subsequent financial burden.

"Under the enforceable undertaking, Suncorp has committed to stringent measures to ensure its employees are paid correctly in the future," the FWO said. "These measures include engaging, at the company’s own cost, two independent annual audits to assess its compliance with workplace laws."