The Reserve Bank of Australia will compensate nearly 1,200 workers after an assessment found it had underpaid its staff by a total of A$1.15 million ($778,000) over a seven-year period.
The central bank said on Wednesday that it had begun repaying 1,173 current and former employee monies due after reviewing its “more complex compensation plans” related to the calculation of leave and days off.
It said most of the outstanding payments related to severance payments for former staffers.
The central bank’s admission was the latest in a series of underpayment schemes by Australian companies and organizations that have been blamed on miscalculations of employee benefits. Miner BHP said this month it would pay $280 million to make up for the underpayments of 30,000 workers over a 13-year period due to errors in how it processed leave.
Julia Angrisano, national secretary of the Finance Sector Union, said it was appropriate that the bank had apologized, but that too many employees were negligent in ensuring their staff were paid properly.
“The RBA should set an example to the financial services industry by always paying its employees the right wages and appropriate entitlements,” she said. “It shouldn’t be for the Financial Sector Union to point out to the RBA that its internal procedures leave staff by the wayside.”
The incident comes after the RBA faced sharp criticism over the effectiveness of its response to rising inflation and interest rate guidelines, which its own governor described as “shameful”.
The central bank last month hired Big Four firm PwC to overhaul its payment systems after the issue of underpayment came to light this year. The contract was met with disapproval from politicians after a tax-leak scandal drew attention to the amount of work the consultant was doing on behalf of the public sector.
The RBA, among others, has stated that it will no longer outsource work to PwC until the incident is reviewed, in which a partner of the firm shared confidential Treasury policy details with colleagues who used them to bring in new clients. completed later this year.
RBA Governor Philip Lowe, whose current term expires in September, has indicated he will remain in office if Prime Minister Anthony Albanese’s government calls for it. But its popularity and the central bank’s reputation have been damaged by the delayed decision to raise rates, which in turn hit mortgage holders.
The bank raised rates 12 times in just over a year this month to 4.1 percent and warned that further monetary policy tightening may be needed to dampen rising prices.
In April, the Australian government announced the biggest shakeup in the central bank’s 63-year history, proposing to set up a new interest rate committee and overhaul its culture.
Lowe told a Morgan Stanley conference in Sydney last week that he believed the bank’s monetary policy was working to mitigate the impact of inflation.
But his comment that people might need to work more and spend less dominated debate about the impact of the RBA’s rapid rate hikes on household finances.
