The National Australia Bank is facing criminal charges and financial penalties for failing to pay long service leave entitlements to casual employees, in alleged violation of Victorian state laws that force private companies to pay full entitlements to non-permanent staff.
The Victorian government’s new employment watchdog, the Wage Inspectorate, filed criminal charges against NAB in the Magistrates Court on October 8 and will argue the bank systematically broke the law by failing to pay former staff members on casual contracts long service leave entitlements.
The Wage Inspectorate was set up in June to enforce state laws covering wage theft, child employment, long service leave and independent contractors. In July, retail giant Coles was fined $50,000 after an investigation by the independent body found more than 4000 Victorian employees were collectively underpaid $700,000 in long service leave.
NAB is being sued by Victoria’s Wage Inspectorate over allegedly withholding long service leave entitlements. Credit:Will Willitts
The total outstanding long service leave entitlements in NAB’s case is estimated to be about $30,000. If the lawsuit is successful, it would set a precedent for private companies to ensure all enterprise bargaining agreements align with Victorian state laws to pay entitlements to casuals and other non-permanent staff.
Victoria’s Long Service Leave Act of 2018 states all employees who have worked continuously with one employer for at least seven years are entitled to long service leave entitlements. This applies to work that is full-time, part-time, casual, seasonal and fixed term.
“It is alleged the company failed to pay former employees their long service leave entitlements when their employment ended, despite them completing at least seven years’ service,” a spokesman for the Wage Inspectorate said. “The Wage Inspectorate will make no further comment while the matter is before court.”
NAB group executive for people and culture Susan Ferrier said casual workers at the bank do not receive long service leave under enterprise agreements that have been in place for the past 20 years.
“We take paying our colleagues their entitlements extremely seriously,” Ms Ferrier said. “NAB takes this issue very seriously and we are carefully considering the allegations made by the Wage Inspectorate Victoria in the Magistrates’ Court of Victoria proceeding.”
NAB launched a counter-claim in the Federal Court on October 12, with the first hearing of this case scheduled for Friday. Ms Ferrier said NAB believes casual workers are not covered by state laws for long service leave, and the bank continues to engage with the regulator on the topic. “NAB has also commenced action in the Federal Court of Australia seeking a declaration about how the relevant law operates to clarify the position.”
Hunt and Hunt’s managing director in Melbourne David Thompson, who specialises in employment law, said NAB may have difficulty defending the case because casuals are entitled to long service leave by law.
“The situation was unclear until 2006 when the Victorian Long Service Leave Act was altered to include an entitlement for all casuals employed on a regular and systemic basis to be paid entitlements,” Mr Thompson said. “There can be some dispute as to what that means but certainly the case authorities on that show that it doesn’t have to be particularly regular.”
Mr Thompson said the definition of “regular and ongoing” is broad and can include staff working a few days per week every few weeks. “But I imagine most casuals with a bank would be employed on a pretty systematic basis, working every Monday and Wednesday, for example.”
The Victorian government has ramped up its focus on industrial law and introduced new wage theft legislation, which came into effect as of July 1 that imposes fines of up to $1 million for companies and 10 years’ jail time for individuals who commit offences.
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