Corporate Travel admits A$2.39m wage underpayments in Australia and New Zealand

Corporate Travel Management has admitted underpaying employees in Australia and New Zealand by A$2.39 million. Adding to a growing list of financial and governance challenges facing the travel management company, as reported by The Australian Financial Review.

A spokesperson told AFR, the firm has identified the historical payroll issue, completed a review of its payroll practices and made arrangements to repay affected employees, including superannuation and interest where applicable. 

The wage underpayments are separate from an ongoing customer rebate issue in Australia, New Zealand and the United Kingdom.

Payroll review uncovers underpayments

Corporate Travel said an independent external adviser validated its payroll review and remediation process, which covered the period from 2019 to 2026.

The company said, “Corporate Travel Management identified a historical payroll issue relating to the interpretation and application of certain provisions under the Clerks Private Sector Award 2020 within its ANZ payroll processes.”

“The company subsequently conducted a review of its payroll practices, identified the employees affected and rectified the underpayments identified through that process.”

The same spokesperson added that it owed employees A$2.39 million and that “payment arrangements have been made accordingly, including superannuation and interest where applicable”.

Separate from customer repayment issues

Corporate Travel said the payroll underpayments are unrelated to a separate issue involving customer rebates.

Last month, the company disclosed it would repay between A$10 million and A$15 million to customers in Australia and New Zealand. However, it has not disclosed further details about the rebates.

The business is also negotiating with the UK government, its largest customer in Britain, over a repayment plan after admitting it overcharged UK government agencies and other clients by £128 million.

Company remains under pressure

Corporate Travel's shares have remained suspended since August after the company entered a trading halt, citing accounting issues identified by its auditors that required the restatement of historical financial statements and its FY25 accounts.

When chairman Ewen Crouch, chief executive Ana Pederson and chief financial officer James Spence presented the findings of a forensic audit conducted by KPMG in April, they declined to confirm whether similar issues had been identified in other markets or whether Australian customers would also receive refunds.

According to The Australian Financial Review, Deloitte is expected to sign off on a highly qualified audit, potentially allowing the company's shares to resume trading by the end of August. The company is also in discussions with subordinated debt lenders to support its repayment obligations.