The world’s largest miner BHP said it had paid fewer than 30,000 workers over 13 years, in a mistake that will cost at least $280 million (AU$430 million) to fix.
BHP said it had improperly deducted leave from thousands of employees who had worked on a public holiday since 2010, when a change to employment laws was implemented but not integrated into payroll systems.
The company’s statement comes during a debate in Australia about raising wages as inflation rises. The country’s central bank warned last week that higher salaries could fuel inflation without a corresponding increase in productivity.
It’s another blow to the reputation of Australia’s mining sector, which is working to reform its culture after reports of sexual assaults and bullying as well as the destruction of Aboriginal sites by Rio Tinto in the Goukan Gorge.
Last week, BHP warned that proposed changes by the Labor government to industrial laws relating to contractor wages would cost it A$1.3 billion and threaten jobs.
The financial hit for BHP, valued at A$212 billion, could rise further as it reviews the wage problem and as it consolidates its nearly A$10 billion acquisition of South Australian rival Oz Minerals. It completed the deal this month but said the vacation discount issue affected Oz as well.
“This is not good enough and falls short of the standards we would expect at BHP. We are working to rectify these issues and address them carefully and as quickly as possible,” said Geraldine Slattery, Head of BHP Australia.
BHP’s mistake was caused by a change in laws in 2010 that stipulated that workers must be compensated for work on a public holiday.
The company conducted a review after a court ruling in March in favor of the mining union said employers were improperly carving out leave.
BHP’s admission that it underpaid tens of thousands of employees would be one of the largest payback cases in Australian history. Woolworths, an Australian grocery chain, agreed in 2021 to increase its back payments to low-paid employees to A$420 million.