Australia’s central bank will reimburse around 1,200 low-wage workers

The Reserve Bank of Australia will compensate around 1,200 employees after a review found it underpaid its employees by a total of A$1.15mn ($778,000) over a seven-year period.

The central bank said on Wednesday that it has begun the process of paying dues to 1,173 current and former employees, following a review of its “more complex remuneration regime” related to how vacation and holiday days are calculated. Was.

It added that most of the outstanding payments were related to termination benefits of former employees.

The central bank’s admission was the latest in a string of underpayment settlements by Australian companies and organizations due to miscalculations of employee benefits. Minor BHP said this month it would pay $280 million over a 13-year period to redress underpayments for 30,000 workers because of mistakes in processing leave.

Julia Angrisano, national secretary of the finance sector union, said it was appropriate that the bank had apologised, but that too many had been negligent in making sure their workers were paid properly.

“The RBA should set an example in the financial services sector by paying its employees the right pay rates and fair entitlements at all times,” he added. “It should not be up to a finance sector union to point out to the RBA that its internal processes are leaving staff out of pocket.”

The incident comes as the RBA has faced fierce criticism over the effectiveness of its response to rising inflation and interest rate guidance, which its own governor described as “shameful”.

The central bank last month hired Big Four firm PwC to review its payments system after a spate of short payments surfaced this year. The contract drew condemnation from politicians following the tax leak scandal, highlighting the amount of work being carried out by the consultant on behalf of the public sector.

The RBA, among other organizations, has announced it will not contract more work to PwC until a review of the incident – ​​in which a partner at the firm shared confidential Treasury policy details with colleagues, who used them to win new business from clients. Used them – is completed later this year.

RBA governor Philip Lowe, whose current term ends in September, has indicated he would stay in office if asked by the government of Prime Minister Anthony Albanese. But his popularity, and the central bank’s reputation, has been damaged by its belated decision to raise rates, which in turn hurt mortgage holders.

The bank this month raised interest rates 12 times in a little more than a year to 4.1 percent and warned that monetary policy may need to tighten further to tame rising prices.

The Australian government in April announced the biggest blow to the central bank’s 63-year history, proposing the establishment of a new interest rate-setting board and changes to its culture.

Lowe told the Morgan Stanley conference in Sydney last week that he believed the bank’s monetary policy was working to reduce the effects of inflation.

But his comment that people may have to work more and spend less has dominated the debate around the impact of the RBA’s rapid rate hikes on household finances.