back to article IBM repays millions to staff after messing up its own payroll

IBM’s Australian limb underpaid 1,647 staff and has been forced to pay them AU$12.3m in back pay (US$8.97m or £6.98m) and make “contrition payments” to Australia’s government. Australian industrial relations laws and rates of pay can be notoriously variable depending on staff qualifications and duties. IBM appears to have run …

  1. lsces

    So which software company wrote IBM's payroll system in Australia?

    1. tip pc Silver badge



      1. xyz123 Bronze badge

        got it's name from the ability to sap peoples will to live.

  2. deadlockvictim

    Incompetence or Evil

    El Reg» IBM appears to have erred, rather than to have intended to underpay staff.

    Yes. That is what must have happened. Senior management wouldn't have allowed the organisation to develop a culture of wrong-doing, merely just a culture of incompetence.

    1. My-Handle Silver badge

      Re: Incompetence or Evil

      Hey, you can be completely evil and still make an honest mistake.

      I can well imagine some IBM exec saying something like "Wait, we did that -by accident-? Damn! If only we'd meant it, we could have done it so much better!"

      1. Bruce Ordway

        Re: Incompetence or Evil

        Reminds me of a theory called Inverse Incompetence.

        I first heard of this at a site in the 90's used to understand the retention of some managers. It explained that people with bad enough plans who can execute them poorly enough may end up achieving something unintended, even beneficial. Superiors, not (never) familiar with details end up basing opinions of the individuals competence and effectiveness on misleading results.

    2. spold Silver badge

      Re: Incompetence or Evil

      ...shouldn't have used that IBM offshore Business Process Outsourcing offering... these things can sometimes boomerang...

  3. Tim99 Silver badge

    Odd indeed

    "and the odd Australian practice of topping up pay packets by a little when staff take their holidays" - Even senior people can get it as part of an "award". My first full-time Oz job Was as a "General Manager". I had bought a new car when I arrived a few months before, to be told that the award gave me an air-conditioned automatic transmission car, and that I was not allowed to take cash instead. After a year I took leave, and while I was away my salary was paid into my account - It seemed to have an overpayment of 17.5%, but when I queried it, I was told that I had "forgotten" my "leave allowance". A workers paradise indeed.

    1. Edwin

      Re: Odd indeed

      I've run into similar rules on company cars in Europe. Only one previous employer gave the option of taking a car or taking cash instead. All others were variations on the theme of 'take it or leave it' - in some cases not even offering public transport compensation (let alone a bicycle) as an alternative.

      The holiday pay thing is also reasonably common in Europe - many countries will pay out an extra couple of weeks in summer and/or winter.

    2. Anonymous Coward
      Anonymous Coward

      Re: Odd indeed

      In France as a regular fte my holiday pay rate is higher than my normal pay rate. it confused me the first time I realized too.

  4. Neil of Qld

    Rates of pay difficult or complex ??? Then why has no worker been accidentally overpaid?

    Funny how big corporation can calculate company tax so efficiently when it is far more complex than pay rates.

    1. Spamfast

      Rates of pay difficult or complex ??? Then why has no worker been accidentally overpaid?

      Upvote because you beat me to it.

      Banks are the same. They claim mistakes are bound to happen from time to time - which is true of course - but never explain why mistakes in their favour far outweigh mistakes in the customers'.

      We all know but it might be refreshing if they occasionally fessed up that they're way more focused on the upper management's remuneration than the customers' interests - or even the shareholders'. ("USR shitting on the little guy".)

    2. DavCrav

      If the discrepancies are not about basic salary but about extra bonuses and allowances that were not added on, it's likely that people would be underpaid, not overpaid.

  5. Anonymous Coward
    Anonymous Coward

    Odd practice..

    The "odd practice" is known as leave loading - I believe its original function was to compensate shift workers for their loss of shift allowance when they were on leave. It's calculated as 17.5% of your salary for your leave period, so it works out at around 1 - 2% of your annual salary depending on how much leave you get.

    Nowadays many companies pay it as an annual one off payment, normally around the end of the year (in my experience the first or second pay period in December). It's not as common as it used to be though.

    The other "thing" we have over here - that confused me when I first moved over here - is Long Service Leave. Basically if you work for a company (the same company) for more than 10 years then you are entitled to between (generally) 8 weeks of paid leave in addition to your normal leave entitlement. Unlike leave loading, long service leave is a federal entitlement so most employees will get it. But you do have to stay with one employer for ten years or more.

    1. Tim99 Silver badge

      Re: Odd practice..

      Yep, and some businesses "restructure" your job before long service is due, and magically your position disappears and you are retrenched. They have to pay out pro-rata though...

    2. Winkypop Silver badge

      Re: Odd practice..


      Who’s complaining?

    3. Mark Exclamation

      Re: Odd practice..

      Actually, long service leave is 13 weeks leave (without the 17.5% leave loading) after 10 years, and continues to accrue for each year thereafter. I should know, I've been with the same company for 33 years. We also have the ability to cash-out accrued sick leave - one week's worth every year on start-date anniversary.

    4. A K Stiles

      Re: Odd practice..

      The other one that intrigued me was that my Australian cousins were able to bank leave allowance over several years and then take e.g. a couple of months off in one big run, as opposed to every job I've had in the U.K. where I've been lucky if I've been able to carry 5 or ten days maximum from one year to the next, with anything more than that being 'lost'.

      The Aus approach seems like a much better system to me - I keep wondering what the downside is about working in Australia, and I can't find it apart from everything that moves, and half the things that don't, trying to kill you.

  6. Anonymous Coward
    Anonymous Coward

    That's just the tip of the iceberg

    All we need now is payment for all the hours we worked OVER what we were paid and charged to the customer.

    Many Australians were paid for 37.5 hours a week or 40 hours per week, as per their employment contract, but worked (and charged the customer) for many more.

    All these extra hours were recorded in one of IBMs multiple and redundant labour tracking systems, and the customer was charged for the hours worked, but the employee only got paid the contract hours, the rest was "expected" and supposed to be a "gift" to IBM.

    Those that refused to work the extra hours for free, were abused by their manager for only "doing the minimum", given poor performance reviews, and made redundant at the earliest opportunity.

  7. Anonymous Coward
    Anonymous Coward

    IBM is utterly broken...

    ...the line between great and bloated is fine; and IBM has definitely oozed over it.

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