Macquarie ordered to compensate underpaid advisers

According to a judgement handed down by the court last week, the bank had breached its obligations under the Banking, Finance and Insurance Award by failing to pay sufficient loading amounts on the former employees’ annual leave, personal leave and compassionate leave periods, as well as on public holidays and when they were terminated from their position.

The case on behalf of 21 former Macquarie Bank advisers sought to prove the bank had not paid them adequate entitlements by seeking to use bonuses and commissions they had earned over the course of their employment to offset their base salary. 

This pay structure had been “designed prior to the [Fair Work] Act to provide maximum flexibility for the tax-efficient structuring of an employee’s remuneration”, the judgement stated.

While the court found the bank could use this offset process to cover their minimum wage payment obligations to its former employees, it did not count towards the additional leave entitlements owing under the award the advisers were covered by.

The court characterised the advisers’ claims as “rapacious” given the “generous revenue sharing benefits” they had received while being employed by the bank, but said it was still “appropriate ... to make orders for payment of compensation ... for the loss suffered by the relevant applicants because of the two contraventions of section 45 of the act”.

A clause within this section of the legislation stated that a worker’s base rate of pay should be comprised of both the minimum wage rate as well as annual leave loading and loading on leave accrued on termination calculated on top of the minimum wage rate.

“The court ... finds that the respondent has failed to prove that this annual leave loading was paid to the relevant applicants or to the relevant applicants on leave accrued on termination,” the judgement said.

The court ordered various levels of compensation between $11,000 and $43,000 plus interest be paid to 16 of the 21 advisers, with the other five cases having been settled out of court.