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Mining giant BHP is the latest Australian company to be hit by an employee payroll scandal after it revealed it has wrongly deducted leave from 28,500 staff, leaving them short by nearly half a billion dollars.
The company said it has self-reported a significant holiday leave problem to the Fair Work Ombudsman after a preliminary review found leave for rostered employees at its Australian operations had been incorrectly deducted on public holidays since 2010, leaving them short by $US280 million ($430 million).
BHP has admitted it wrongly deducted staff annual leave.
About 28,500 staff at the $213 billion ASX-listed resources giant were affected by their leave entitlements being miscalculated over a 13-year period.
“A preliminary review suggests that certain rostered employees across our Australian operations have had leave incorrectly deducted on public holidays since 2010,” BHP said in a statement.
“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 this 13-year period,” it said.
Mass underpayment by major corporates has soared during the past four years.
The Fair Work Ombudsman recovered a record $532 million in backpay in 2021-22, more than half of which came from big companies forced to backpay nearly $279 million to more than 267,000 employees.
In a recent court case, the Commonwealth Bank of Australia admitted to knowingly underpaying thousands of staff more than $16 million in a systemic, decade-long scandal where it repeatedly ignored warnings from human resources.
The spate of underpayments comes as the Albanese government considers hefty $4 million fines for workplace breaches and jail time for employers found to recklessly underpay staff or who ignore systemic pay issues.
“We are sorry to all current and former employees impacted by these errors. This is not good enough and falls short of the standards we expect at BHP. We are working to rectify and remediate these issues, with interest, as quickly as possible,” the company’s Australian president Geraldine Slattery said.
BHP said its investigations showed the problem may also impact employees at OZ Minerals, which it recently acquired in a $9.6 billion deal.
The company said it will contact affected current and former employees regarding remediation as soon as possible and set up a dedicated hotline and website to provide information for affected staff by Friday.
BHP said its investigations showed the leave deduction problem may also impact employees at OZ Minerals, which it recently acquired in a $9.6 billion deal.
The company said it has identified about 400 current and former employees at Port Hedland who are entitled to additional allowances because of an error with the “employment entity in their contract.”
“Based on currently available information, it is estimated that the cost of remediating the leave issue and the contracting issue will be up to $US280 million pre-tax, incorporating on costs including associated superannuation and interest payments,” BHP said.
BHP said the investigation is ongoing and it will update investors with further details when it reports its full-year results in August.
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