Own NAB shares? Here’s why the ASX 200 bank is facing Federal Court action

A judge bangs down the gavel.A judge bangs down the gavel.

National Australia Bank Ltd (ASX: NAB) shares are down 0.9% in afternoon trade, broadly in line with the wider market decline. 

The S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $29.71 per share. Shares are currently changing hands for $29.44 apiece.

That’s how NAB shares are moving on Wednesday.

Now, here’s why the big bank is facing Federal Court action. 

How much unpaid overtime is ‘reasonable’?

In news that doesn’t appear to be having a material impact on NAB shares today, The Australian Financial Review reports that the Finance Sector Union (FSU) is launching a Federal Court action against the bank today.

The union is acting on behalf of four managers who allege their work weeks stretched to as much as 55 to 80 hours, with no extra pay for the overtime. The managers are seeking unspecified compensation.

According to FSU national secretary Julia Angrisano:

While they are nominally employed to work 38 hours a week, their actual hours can range between 10 and 16 hours a day, every day of the week, in order to meet excessive workload demands.

Angrisano added that many NAB managers have to do “unpaid work on weekends to complete assigned tasks or risk being sacked”.

The excessive hours, she said, are negatively impacting “their health, their relationships, the time available to spend with their families and their overall quality of life”.

According to NAB’s enterprise agreement, the managers are classified amongst a group that’s not entitled to overtime penalties, and their normal 38 hours work week allows for “reasonable overtime”.

It will be up to the courts to pass judgement on this tricky situation.

But if the union’s action on the four managers’ behalf is successful, NAB shares could face some headwinds, as the penalty may be significant.

“If we win this case, the FSU will be demanding the bank compensate up to 10,000 staff who are also subject to similar levels of excessive unpaid work,” Angrisano said (quoted by the AFR). The union is also seeking “substantial” punitive penalties against NAB.

And the FSU has other big fish in its crosshairs as well.

“This case is just the start,” Angrisano said. “We know the culture of the big banks exploits workers and we will be going after them as well.”

How have NAB shares been tracking?

As you can see in the chart below, NAB shares have been in decline over the past month, but remain up 3% since this time last year.

The post Own NAB shares? Here’s why the ASX 200 bank is facing Federal Court action appeared first on The Motley Fool Australia.

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