IAG enters Enforceable Undertaking with Fair Work Ombudsman

IAG enters Enforceable Undertaking with Fair Work Ombudsman

IAG today confirmed it has entered an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO) in relation to the underpayment of certain employee entitlements and outlined the steps it is taking to help prevent these errors happening in the future.

In February 2020, IAG commenced a proactive review of its payroll processes for employees which identified that 6,094 current employees and 14,117 former employees had been underpaid one or more entitlements, including certain overtime, allowances, and superannuation contributions.

Since that time, IAG’s focus has been on remediating impacted employees as quickly as possible and payments, including interest, were made to impacted current and former employees in 2022 and 2023. A further payment has been made to the Commonwealth Government for former employees who could not be contacted after multiple attempts.

IAG has apologised to the current and former employees who were impacted by these errors.

A key cause of these issues was IAG’s payroll system which required employees to submit their claims for entitlements manually, rather than having them automatically calculated by IAG’s payroll system.

To help prevent these issues happening in the future, IAG has introduced new controls and payroll processes, and invested in a time and attendance system that will automatically calculate employees’ entitlements. The new time and attendance system is on-track to be implemented by September 2024.

IAG provisioned for remediation payments and related costs as part of its payroll compliance review outlined in its FY21 Financial Results announcement released on 11 August 2021.

As part of the EU, IAG will make a contrition payment of $650,000 to the Consolidated Revenue Fund. This payment will fall within IAG’s existing provision for its payroll compliance review ($6 million as at 30 June 2023).

A copy of the EU is available via the FWO website: www.fairwork.gov.au

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