Aussie Mining Giant BHP Admits to Underpaying Almost 30,000 Workers

The company logo adorns the side of the BHP global headquarters in Melbourne, Australia, on Feb. 21, 2023. William West/AFP via Getty Images

One of Australia’s leading mining companies, BHP, has admitted to underpaying 28,500 Australian workers’ allowances and entitlements dating back to 2010.

In a June 1 statement, the company said a preliminary review suggested that former and current workers were incorrectly deducted six days’ leave on average during the 13-year period.

“In addition, BHP has identified that approximately 400 current and former employees at Port Hedland are entitled to additional allowances due to an error with the employment entity in their contract,” the company statement stated.

The company said the cost of remediating the leave entitlements is estimated to be $423.6 million (US$280 million) pre-tax.

BHP’s Australian president, Geraldine Slattery, apologised to all current and former employees affected by the error.

“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,” Slattery said.

The company said it had self-reported the error to the Fair Work Ombudsman and has assured current and former employees that it will contact them regarding remediation.

Meanwhile, Protiviti, a global assurance firm, has been engaged to conduct a thorough review of the company’s systems.

This follows BHP’s criticism of the Albanese government’s same job, same pay laws that would cost the mining giant up to $1.3 billion per year. Under the proposed law, all workers employed through labour-hire companies will receive the same wage as employees employed directly.

Union Says Major Win For Employee Rights

Meanwhile, the Mining and Energy Union (MEU) said BHP’s underpayment error was uncovered following a win in the Federal Court that sought clarification on employee rights around public holidays under the National Employment Standards.

The court found that companies could not automatically treat public holidays as work days without first asking employees to work the days and allowing employees to refuse that request.

MEU general secretary Grahame Kelly said BHP had been caught “ripping workers off” and that the union would ensure affected members received their full entitlements.

“BHP has been sprung ripping workers off by hundreds of millions of dollars,” Kelly 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.”

The Industrial Relations Minister Tony Burke has also weighed in on the matter.

“Just last week, BHP was trying to assure us that their employment practices were impeccable and the government didn’t need to close any loopholes to protect wages,” Burke said.

“That’s clearly not true. Australia can do better to make sure workers are properly paid. That’ll be the focus of our legislation in the coming months.”

Employment and Workplace Minister Tony Burke speaks during the jobs and skills summit at Parliament House in Canberra, Australia, on Sept. 1, 2022. Martin Ollman/Getty Images

This comes as other Australian companies were ordered to backpay underpayment incidents over the past three years.

For example, in 2021, the Fair Work Ombudsman (FWO) commenced legal action against Coles Supermarkets for allegedly underpaying 7,805 salaried employees, a total of $113.8 million. The FWO alleged that the highest underpaid amount for an individual salaried employee is $469,921, and 44 employees were allegedly underpaid in excess of $100,000.

In June 2020, the Australian Broadcasting Corporation (ABC) agreed to pay 1,800 current and former casual staff $11.9 million for underpayment, reported the ABC.