IBM has back-paid 1,647 Australia staff $12.3 million after admitting to underpaying them for almost a decade.
The global tech giant has entered into an enforceable undertaking (EU) with the Fair Work Ombudsman (FWO) to back-pay the employees, many of whom were lower-salaried call centre workers in Ballarat.
According to the FWO, IBM identified employees that were underpaid between 2012 and 2020, with back payments ranging from $1 to over $145,000.
The employees most significantly affected included technical staff who used a motor vehicle as part of their role, as well as the casual workforce.
The underpayments stemmed from IBM failing to apply a number of awards that were available across all states and territories to most of its employees.
These included the Business Equipment Award 2010, the Professional Employees Award 2010, the Banking, Finance and Insurance Industry Award 2010 and the Nurses Award 2010.
According to the FWO, IBM had failed to apply the Award to most of its employees because they were salaried professionals earning significantly above minimum award wage rates.
This caused IBM to ignore 15 different award entitlements and conditions, including vehicle allowances, superannuation entitlements and annual leave loading.
As such, a significant number of casual staff at IBM’s contact centre in Ballarat were paid the national minimum wage, as opposed to the higher rates and entitlements in the applicable Award.
“Under the Enforceable Undertaking, IBM has committed to stringent measures to comply with the law and protect its workforce,” FWO Sandra Parker said.
“This includes engaging, at its own cost, an expert auditing firm to conduct an independent assessment of the outcomes of its rectification program and to audit its compliance with workplace laws over the next two to three years.
“This matter serves as a warning to all employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale.”
The full scale of IBM’s underpayment has yet to be determined, but is expected to pay all outstanding amounts to every affected employee by 16 October this year.
In addition to this, IBM will also make two contributions to the Commonwealth’s Consolidated Revenue Fund by 27 November 2020, valued at 5.25 per cent of the underpayments.
The FWO also ordered IBM to fund an independent Hotline to assist its employees for the next 12 months, display public, workplace and online notices detailing its workplace law breaches and must apologise to workers.
In a statement to ARN, IBM did apologise to those affected, calling the underpayments a “genuine error”.
"IBM Australia discovered during an internal review that some employees had received allowances and remuneration that did not align to modern award conditions. IBM self-disclosed the error to the Fair Work Ombudsman and immediately undertook to repay all affected employees with interest,” a spokesman said.