CBA (ASX:CBA) share price edges higher amid legal proceedings

What's going on with the bank?

| More on:
A businessman points a finger in accusation, indicating a share price or ASX company in trouble

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Commonwealth Bank of Australia (ASX: CBA) share price is climbing slightly today despite news of legal proceedings launched against the company.

At the time of writing, the CBA share price is up 0.07% trading at $104.53 apiece. This means that in the past week alone, CBA shares have elevated almost 5%.

What did CBA announce to the ASX?

In its release, the bank advised that the Fair Work Ombudsman (FWO) had started civil proceedings against CBA and its stockbroking firm, CommSec.

The FWO alleges that Australia's largest bank breached the Fair Work Act by not paying 7,425 of its employees their correct entitlements. Staff mainly in customer services roles were affected by the underpayment.

The total discrepancy came to around $16.44 million for the period between October 2015 and December 2020.

The matter was taken to the Federal Court following the FWO investigation.

CBA defence

CBA noted that a comprehensive remediation program has been underway since early 2018 to identify issues dating back to 2010. The bank self-reported the employee entitlement payments to the FWO and publicly disclosed them in 2019.

The bank advised that the underpayments had led to it strengthening its systems and processes to ensure the issue was not repeated.

All missing entitlement payments have since been remedied, and CBA believes no further compensation payments are required.

Furthermore, the company highlighted that it was constructively working with the FWO to resolve the proceedings.

The maximum penalty for each company for the contraventions is up to $666,000 per breach.

A date is yet to be determined for when the matter will be heard in the Federal Court.

CBA share price snapshot

The CBA share price continues its upwards trajectory to post a 50% gain in a year. When looking at 2021, its shares have moved almost 30% higher for the period.

CBA commands a market capitalisation of roughly $178.59 billion, making it the biggest company on the ASX.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Hand with AI in capital letters and AI-related digital icons.
Bank Shares

CBA shares lead the big 4 banks in using AI to cut costs

AI initiatives could transform the banking sector.

Read more »

A businessman presents a company annual report in front of a group seated at a table
Bank Shares

The future of the Big 4 banks: key takeaways from Macquarie's 2025 Banking Symposium

What lies ahead for the big 4 banks?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank.
Bank Shares

CBA shares are down 9% from their peak. Is it time to buy?

CBA shares are getting cheaper, but are they cheap yet?

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Bank Shares

The pros and cons of buying NAB shares in August

Is it a good time to invest in the major bank? Here’s my view.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Dividend Investing

Are CBA shares still a good buy today for passive income?

Looking to earn passive income from ASX dividend stocks? Here’s my take on CBA shares.

Read more »

Shocked office worker staring at computer screen with colleagues working in the background.
Bank Shares

The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

Read more »

man thinking about whether to invest in bitcoin
Bank Shares

Here's what needs to happen for the CBA share price to try and reach $200

What could drive the CBA share price higher?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

Why now could be an opportune time to sell CBA shares

A leading expert offers his verdict on the outlook for CBA shares.

Read more »