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Macquarie Bank’s HR department designed a defective pay system that a competent IR lawyer would have quickly identified, the Federal Circuit Court has held in fining the bank $330,000 on top of $1.3 million in compensation owing to wealth advisors.

Judge Sandy Street’s penalty judgment follows his findings last October that the three related claims by 48 former wealth advisors could be seen as “double-dipping”, but the bank nonetheless breached its statutory obligations.

After examining the bank’s tax-efficient pay package, comprising commissions and a $60,000 to $70,000 base salary, the judge found the advisors did not receive their full entitlements to annual, personal and compassionate leave, leave loading and public holidays, despite collectively earning more than $50 million in commissions between 2013 and 2019.

Judge Street late last month said the court “does accept that the nature and the extent of the loss in the present case was not very significant in comparison to the overall remuneration, and that the applicants were, in fact, well remunerated”.

But the bank failed to remunerate them in accordance with their entitlements under the Fair Work Act and the Banking, Finance and Insurance Award, he found.

Judge Street said the breaches “arose from a defective and deficient system designed by [a] human resources department without proper attention to the terms of the Act and the Award”.

Judge Street said Macquarie Bank’s HR department “should have been the subject of proper and adequate supervision systems by the board to ensure compliance with workplace laws”.

Judge Street said Macquarie Bank provided no evidence “at the corporate mind level” on its belief about current and former systems in place to comply with the Act and the award and the basis for this belief.

“This is in circumstances where [Macquarie Bank] would have the finest legal minds readily available to it in respect of its obligations under the Act and vast resources to ensure compliance. . . and quite apart from the other internal auditing and supervision that should have been in place over the period of the contraventions.”

Justice Street found a need for a specific and general deterrence, noting even a penalty “towards the smaller end of sting, is likely to advance the public interests in terms of compliance with the Act and the award by other employers” in the banking industry.