NAB underpaid 65,999 of its own staff since 2012, and will hand over a record $2 million to say sorry

One of Australia’s four biggest banks got its own staff’s pay wrong for 14 years.

NAB has entered an enforceable undertaking with the Fair Work Ombudsman after underpaying 65,999 workers, the regulator said on Thursday morning. The bank is back-paying $127 million in wages and entitlements, $34 million in interest and $8 million in superannuation. It says it has already paid at least $155 million to current and former employees.

On top of that, NAB will pay $2 million into the Commonwealth’s consolidated revenue fund. It is the largest contrition payment ever included in an undertaking signed with the Ombudsman.

How did a bank get pay wrong for so long?

NAB self-reported in late 2019 after finding significant errors in how it had applied its enterprise agreement. A wider review found non-compliance going back to 2012. Then, while bringing in a new agreement in 2024, the bank found it still had not properly identified and fixed the problems.

The Ombudsman listed the causes: weak governance and compliance oversight, poor record-keeping, old payroll technology and too little specialist payroll expertise. NAB also failed to capture time-and-attendance data properly, did not accrue leave correctly and misapplied entitlements under successive agreements.

“It’s particularly disappointing to see these types of large and long-running underpayment issues,” Fair Work Ombudsman Anna Booth said. She said the undertaking was appropriate because NAB had cooperated and committed to full repayment and better governance.

What does NAB have to do now?

Under the undertaking, NAB must finish its payroll review and pay anyone else found short, bring in a new payroll platform and time-recording process, and have an independent auditor run at least two compliance audits. A steering committee chaired by its people and culture chief must plan any future enterprise agreement, and the board must get regular compliance reports.

“We sincerely apologise for these unintended errors,” said Sarah White, NAB’s group executive for people and culture. The bank says it will contact affected people directly.

What does the union say?

The Finance Sector Union, which covers bank staff, rejected the idea that this was a simple payroll slip. “Underpayment of wages is theft, pure and simple,” national president Wendy Streets said, adding that it was hard to believe a big four bank with its resources could make such a “colossal mistake”.

What does it mean for workers?

For most of the 65,999, the money is modest: about $1,934 each on average. For a few, it is more than $87,000. The larger signal is to employers. “Complying with workplace laws is an organisation-wide responsibility,” Ms Booth said, noting that NAB had negotiated its own agreement but did not have payroll systems that could follow it. The Ombudsman says it has recovered more than $1.2 billion for workers at large corporates over the past five financial years.

VNN will update this story as more is confirmed.