Mining giant BHP has revealed nearly 30,000 current and former staff have lost leave and pay entitlements over the past 13 years in one of Australia’s largest case of employee underpayment.
Mining giant BHP has revealed nearly 30,000 current and former staff have lost leave and pay entitlements over the past 13 years in one of Australia’s largest case of employee underpayment.
It has estimated the cost of remediating the issues will be up to $US280 million pre tax ($A430 million).
BHP said a preliminary review suggested that, since 2010, leave had been incorrectly deducted when some employees, who were mostly rostered and site based, had taken time off work on a public holiday.
There are approximately 28,500 affected employees (19,000 current and 9,500 former) with an average of six leave days in total that have been incorrectly deducted over this 13-year period.
BHP said initial investigations suggest that OZ Minerals had been affected by a similar leave deduction issue before being acquired by BHP last month.
In addition, BHP said about 400 current and former employees at Port Hedland were entitled to additional allowances due to an error with the employment entity in their contract.
BHP joins numerous other businesses in reporting employee underpayments but at a much larger scale.
Other examples include Woolworths, which last year said the total cost of its underpayments to staff had risen to $571 million.
The Commonwealth Bank paid about $50 million to cover underpayments over a decade, along with Qantas ($7.1 million), the ABC ($12 million), Bunnings and Super Retail Group.
Employers started self-disclosing underpayments to the Fair Work Ombudsman after laws brought in by the Coalition in 2017 increased fines and liability for underpayments.
The scale of the problem has been growing, judging by the latest data from the Fair Work Ombudsman.
It recovered $532 million in unpaid wages and entitlements for more than 384,000 workers in 2021-22, three times higher than the previous year.
The Albanese government has proposed an increase in fines for workplace breaches to $4 million and is considering jail time for employers who turn a blind eye to systemic issues and recklessly underpay staff.
BHP’s president Australia Geraldine Slattery said the company was sorry to all current and former employees affected by the errors.
“This is not good enough and falls short of the standards we expect at BHP,” Ms Slattery said in a statement.
“We are working to rectify and remediate these issues, with interest, as quickly as possible.”
Protiviti, a global assurance firm, has been engaged to conduct a thorough review of BHP’s payroll systems.
The Mining and Energy Union said today that BHP's underpayment had been uncovered as a result of a Federal Court ruling in March, clarifying employee rights around public holidays under the National Employment Standards.
The Full Court decision, in a matter brought by the Mining and Energy Union against BHP’s labour hire subsidiary Operations Services, found that companies could not automatically treat public holidays as work days without first asking employees to work the days, and employees having the opportunity to refuse that request.
“BHP has been sprung ripping workers off by hundreds of millions of dollars,” the union’s general secretary, Grahame Kelly, said.
“Today’s revelation goes to show that we need to keep up the pressure on big companies like BHP to do the right thing.
“BHP has assumed that because they want round-the-clock profits from their mining operations, their workers aren’t entitled to their public holiday rights.”
The company said it would contact affected current and former employees regarding remediation as soon as possible.
A dedicated hotline and website will be established to provide assistance from Friday.
BHP has self-reported the issue to the Fair Work Ombudsman.
