IAG back-pays 19,000 workers in $21m settlement
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The news: Insurance Australia Group has back-paid workers more than $21 million owed under federal workplace laws, and signed an enforceable undertaking (EU) with the Fair Work Ombudsman.
The numbers: The companies that have entered into the EU with the Fair Work Ombudsman are Insurance Australia Group Services and Insurance Manufacturers of Australia, which are both subsidiaries of IAG and employ more than 90% of IAG’s workforce.
IAG entities have back-paid more than 19,000 current and former employees more than $21 million in wages and entitlements that was owed under federal workplace laws between 2013 and 2023, plus several million dollars in interest and superannuation.
Overall, the average back-payment is just over $1,000, though 14 workers have been back-paid more than $200,000.
In addition, the IAG entities have back-paid workers a total of $16.2 million in long service leave entitlements that was owed under state and territory laws between 2013 and 2022.
IAG must also make a $650,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.
Shares in IAG were down 0.71% to $6.34 in early trading on the ASX.
The context: IAG is Australia’s largest general insurer under brands including NRMA Insurance, RACV, CGU, SGIO, Swann Insurance, WFI and ROLLiN. It self-reported non-compliance issues to the Fair Work Ombudsman in December 2020, after identifying underpayments when it conducted an internal review.
The underpayments were caused by 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.
Underpaid workers were located across the country and were engaged in a range of positions including IT professionals, IT support workers, frontline claims staff and call centre staff.
What they said: 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".
“Their new measures include commissioning, at their own cost, an independent audit of the new time-and-attendance and payroll systems to check that they are fully complying with all aspects of workplace laws," she said.
The source: Fair Work Ombudsman media release
