Having worked across a range of large-scale payroll and workforce transformation programs, we can say with confidence that underpayments are rarely about intent - and almost always about systems.

The recent Federal Court rulings against Woolworths and Coles - with nearly $1 billion in combined liabilities - have shown just how quickly payroll issues escalate from operational glitches to full-blown legal, financial and reputational risks. And this isn’t isolated to retail. In banking, education, logistics and beyond, we’re seeing the same themes repeat: outdated payroll platforms, disjointed data flows, and growing exposure to Australia’s increasingly strict industrial relations environment.

Certain industries carry even greater exposure - particularly services sectors such as quick-service restaurants (QSR), aged care, disability care, early childhood education, and professional services. These environments tend to combine high award complexity, shift-based rosters, frequent workforce changes, and manual time capture - all of which magnify payroll risk when systems aren’t fit-for-purpose.

We’re not dealing with one-off errors
NAB has already incurred over $250 million in payroll remediation, with a further $130 million expected in FY25. And across the board, the common failure points are the same:

• Incomplete or misclassified time capture
• Manual award interpretation
• Disconnected HR, time and payroll systems
• Limited audit visibility

These aren’t isolated compliance issues - they’re signs of infrastructure that simply isn’t designed to handle the complexity of Australian awards. As we’ve seen repeatedly, when payroll systems can’t reconcile entitlements each cycle, errors aren’t just possible - they’re inevitable.

Australia’s award system demands more from payroll tech
Employers in Australia face a uniquely complex landscape: award conditions vary by role, location, day, and even time of day. The court has now made it clear:

• Reconciliation must happen every pay cycle
• Annualised salaries aren’t a shield for errors
• Record-keeping must be comprehensive and auditable

Most legacy systems were never built to handle this. They rely on manual inputs, offline workarounds, and brittle integrations - all of which introduce compliance risk at scale.

Integration gaps are the real risk
The most common issues - incorrect payments, outdated award application, poor visibility - often stem from one core problem: disconnected systems. In many organisations:

• Time and attendance doesn’t feed directly into payroll
• Employee changes aren’t reflected across systems in real time
• Award rules are managed offline or through static configurations
• Reconciliations are performed ad hoc, if at all

The result is a black-box payroll environment, where errors can persist unnoticed for months or even years - until they surface under audit or through employee claims.

What good payroll systems should actually deliver
Modern payroll systems need to move beyond operational processing and become a core compliance control point. At a minimum, they should:

• Automatically enforce award rules, with no “off-system” overrides
• Reconcile pay against entitlements every cycle
• Ensure end-to-end integration from onboarding to payroll
• Log every configuration change in a traceable, auditable format
• Version-control award rules, so historical decisions can be defended

In practice, this means payroll platforms must evolve from passive processors to proactive compliance systems - giving HR, finance, and leadership the tools they need to prevent issues before they escalate.

Where to from here?
The lesson from Woolworths, Coles, NAB and others is clear: payroll risks are structural. They stem from systems and processes that haven’t kept pace with today’s regulatory expectations.

If underpayments are showing up in your business, the root cause probably isn’t negligence - it’s infrastructure. Payroll systems are now a frontline compliance mechanism, so this isn’t acceptable.

At Tenet Advisory & Investments, we work with clients across sectors to modernise their payroll ecosystems - from HCM and T&A strategy through to platform analysis, selection and implementation. Whether it’s reducing complexity, improving compliance, or building a modern payroll architecture, the right foundation matters.

The real question is this: Are your systems designed to prevent underpayments - or simply to process them?