IAG has been ordered to pay more than $21 million to thousands of workers who were cut short due to what the Fair Work Ombudsman called “basic shortcomings” in the insurance giant’s processes.
Insurance Australia Group, considered the biggest general insurer in the country, signed an enforceable undertaking with the Fair Work Ombudsman on Friday.
IAG has had to back-pay more than 19,000 current and former employees more than $21m all up in wages and entitlements owed to them over a decade between 2013 and 2023.
“The underpayments were caused by basic shortcomings in the IAG entities’ processes, including not having time and attendance systems in place, resulting in them not paying employees for their actual hours of work,” the Ombudsman said on Friday.
The average payment was $1000 but 14 workers have been back-paid more than $200,000.
“The IAG entities also failed to perform reconciliations and top up payments necessary to ensure that the entitlements they were paying employees under their enterprise agreements were no less beneficial than employees’ minimum entitlements under the applicable awards.”
The company had self-reported the underpayments to the Fair Work Ombudsman in December 2020 after conducting an internal review.
IAG also had to fork out an additional $16.2m worth of long service leave entitlements owed to workers between 2013 and 2022.
Fair Work Ombudsman Anna Booth said IAG had “substantial, long-running compliance breaches underpinned by flawed processes”.
“Once identified however, IAG responded strongly and invested heavily to fix those problems, including through new measures to ensure all its workers are paid correctly in future,” she said.
IAG had agreed to commission an independent audit of new payroll systems.