Mining giant BHP has discovered that current and former employees have had their wages incorrectly deducted since 2010 and has estimated it will cost US$280 million (£225m) to reimburse them.
A preliminary review has suggested that many employees across its Australian operations have had annual leave incorrectly deducted on public holidays over a 13-year period.
Around 28,500 current and former employees with an average of six leave days in total have been affected. Initial investigations suggest that OZ Minerals has been affected by a similar payroll error before being acquired by BHP last month.
We will make sure all our affected members receive every cent they are owed due to this stuff-up” – Grahame Kelly, MEU
In addition, BHP has identified about 400 current and former employees at Port Hedland in Western Australia who are entitled to additional allowances because of an error in their employment contracts.
Geraldine Slattery, BHP president Australia, said: “We are sorry to all current and former employees impacted by these errors. This is not good enough and falls short of the standards we expect at BHP. We are working to rectify and remediate these issues, with interest, as quickly as possible.”
In a statement to the Australian Stock Exchange, BHP estimated that the cost of remediating the payroll errors will be up to US$280 million pre-tax, incorporating costs including associated superannuation and interest. It is continuing to investigate and will provide an update in its full-year results in August.
Payroll problems
Five national minimum wage mistakes employers make
Global consulting firm Protiviti has been hired to conduct a thorough review of BHP’s payroll systems.
Grahame Kelly, general secretary of the Mining & Energy Union, told ABC News that BHP had been “sprung ripping workers off” and the union would ensure affected members received their full entitlements.
He said: “Today’s revelation goes to show that we need to keep up the pressure on big companies like BHP to do the right thing. BHP has assumed that because they want round-the-clock profits from their mining operations, their workers aren’t entitled to their public holiday rights.
“We will make sure all our affected members receive every cent they are owed due to this stuff-up.”
BHP, which reported itself to Australia’s Fair Work Ombudsman, will contact all people affected regarding remediation and a dedicated hotline and website is being launched to provide assistance.
In a Q&A document released as part of the payroll review, BHP said: “Calculating any historical entitlements is a highly manual process and requires assessment of many different data points and records for each individual affected, including inputs such as payslips, rosters, swipe data. As soon as we have this information, we will share this with affected
employees, and make any required payments.”
Melbourne-based BHP is the world’s largest mining company and, in the year to June 2022 recorded a profit of US$31 billion on revenues of US$41 billion.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
It is listed on the Australian stock market but until January 2022 was also listed in London as a FTSE 100 company. There are around 80,000 BHP employees and contractors worldwide.
