March 13, 2020 / 2:56 AM / 25 days ago

UPDATE 1-Qantas Airways says it underpaid hundreds of staff by $4.5 mln

(Recasts first paragraph; adds Qantas comment)

March 13 (Reuters) - Qantas Airways Ltd underpaid hundreds of employees by about A$7.1 million ($4.47 million) after self-reporting non-compliance with employment contracts, the airline and a government organisation said on Friday.

A misclassification issue affected 1,000 current and former employees, leading to about 640 being underpaid while the remainder were overpaid A$22 million, Qantas said in a statement.

The revelation adds to a growing list of underpayment scandals hitting several of Australia’s biggest companies including supermarket chains Woolworths Group Ltd and Coles Group Ltd and the country’s biggest lender Commonwealth Bank of Australia, among others.

Qantas entered a court-enforceable undertaking with the Fair Work Ombudsman to fix the misclassification issue that the airline self-reported in February last year.

The issue saw some employees subject to the wrong terms and conditions and as a result received incorrect benefits, Qantas said.

The government organisation said underpayment occurred from June 2011 through June 2019 and that head office staff were also affected.

Qantas agreed to an independent audit for the next three years as part of the Enforceable Undertaking to address the issue.

The federal government has said it would introduce laws that criminalise what it called “wage theft”, as well as banning people from being company directors if they preside over underpayment.

($1 = 1.5873 Australian dollars)

Reporting by Aby Jose Koilparambil and Nikhil Kurian Nainan in Bengaluru; Editing by Shri Navaratnam and Christopher Cushing

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