Bunnings Announces its $6.1 Million Underpayment of Staff

Power Retail By Power Retail | 29 Nov 2019

More than 40,00 current and former Bunnings employees will soon receive unpaid superannuation payments as a result of the company’s ‘payroll error’. The retailer made an announcement today of the amount to be paid, accounting to $6.1 million in total.

Bunnings owes $3.89 million in unpaid superannuation, which has affected a total of 40,890 workers. Added to this total is compensation, which increased the figure $6.1 million. The compensation includes interest payments to workers, which was calculated on a compound basis. “This results in a higher payment and is more consistent with how superannuation earnings are accrued,” said a spokesperson for the company.

The announcement was made in September, but the Australian retailer has only now confirmed the amount that it will repay its employees. The majority of Bunnings workers are set to receive less than $70, which has been issued to the ATO (Australian Tax Office).

Bunnings’ Human Recourses Director, Jacqui Coombes said they were ‘very sorry’ for the incident. “We understand the importance of ensuring our team members are paid everything they are entitled to in full and on time – in this case, whilst inadvertent, we haven’t, and we are very sorry for that,” she said in September when the story originally broke.

What Can Retailers Learn From This?

This isn’t an isolated incident for large retailers, but it is something that can be avoided, says Tracy Angwin, the CEO and founder of the Australian Payroll Association. “Despite eight years of incorrectly calculating superannuation with no one checking the outputs, we are again seeing an organisation blaming the payroll system for its employee underpayments. Bunnings has found itself in a position where it initially underpaid its staff by a relatively small amount and, over eight years, this has ended up affecting almost 41,000 of its employees and amounted to more than $6 million,” she tells Power Retail.

“The Bunnings situation is made worse by the fact that for the entire eight-year period, it has had in place a payroll team that has failed to pick up these errors prior to them becoming an enormous issue. It raises the questions: does the Bunnings payroll team have qualifications, and what training was provided to them to check that their payroll outputs were correct?”

“With government legislation and employee awards regularly changing, it is crucial for business managers and company directors to start taking these matters seriously and engage trained payroll professionals who have completed compliance audits to keep up to date with their payroll knowledge,” she says. “That way companies can avoid making headlines for their payroll errors.”

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