Commonwealth Bank of Australia (ASX: CBA) shares are up a touch during lunch hour on Wednesday.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $99.40 each. They are currently trading for $99.41 a share, up just 0.01%. Westpac Banking Corporation (ASX: WBC) is the only other of the big four Aussie banks in the green at the time of writing.
That's what's happening with CBA shares today.
Now, what's this about the ASX 200 bank potentially facing "the full wrath of the law"?
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What are the latest legal developments?
In news that doesn't appear to be dragging on CBA shares today, The Australian Financial Review reports that CommBank has admitted in Federal Court that its management was aware thousands of staff were underpaid $16.1 million since 2010.
The long-running issue, first raised by the Finance Sector Union, encompasses 7,402 CBA and CommSec staff. The employees worked significantly more hours than they were paid for through the bank's mass use of individual agreements, which were said to undermine union agreements.
CBA has already repaid the $16.1 million, plus interest, to the impacted staff.
But it's the bank's admission that management was aware of the issue and let it continue that could end up costing it a massive fine, potentially throwing up headwinds for CBA shares down the road.
According to the AFR, Australia's biggest bank could cop a fine of $660,000 per breach under a provision of the Fair Work Act covering workplace laws. With 7,402 impacted staff, I'll let you do the maths.
And CommBank is unlikely to get much sympathy from Finance Sector Union national secretary Julia Angrisano.
"Basically, Australia's biggest bank has now conceded that it has knowingly participated in wage theft," Angrisano said.
Angrisano added:
This is a remarkable admission that should cause deep unease within the finance industry, with regulators and within government. Those responsible for this truly unconscionable conduct should face the full wrath of the law. If this wage theft can occur in our biggest bank, truly no worker in this country is safe.
A CBA spokesman (quoted by the AFR) said the bank had made "certain admissions" in the underpayment case.
"We acknowledge that any instance of employees not being paid their correct entitlements is unacceptable," he said. "CBA and CommSec have co-operated fully and engaged constructively with the FWO [Fair Work Ombudsman] during its investigation and the proceedings."
Stay tuned!
How have CBA shares been tracking?
As you can see in the chart below, CBA shares came under pressure in February and are currently down 2% in 2023 so far.
