Australia Post says it will fully cooperate with an investigation into the decision to give four $3000 Cartier watches to senior staff as a reward for a deal to do banking in post offices.
Group CEO and managing director Christine Holgate will stand aside during the investigation, triggered after Prime Minister Scott Morrison was informed of evidence given at a Senate estimates hearing on Thursday.
Rodney Boys, the chief financial officer of the government-owned business, will act in the role during the investigation.
"The Australia Post board and management team will fully cooperate with the recently announced investigation to be conducted by shareholder departments," chairman Lucio Di Bartolomeo said in a statement.
"We remain committed to delivering for our important stakeholders - our people, our post office partners, our customers and the community."
The investigation will be conducted by the federal communications and finance departments, supported by an external law firm, and take four weeks to complete.
Mr Morrison said the gifts were disgraceful and appalling.
"She's been instructed to stand aside and if she doesn't do that, she can go," he told parliament.
Prime Minister Scott Morrison speaks to Communications Minister Paul Fletcher during House of Representatives Question Time, Thursday, October 22, 2020. Source: AAP
Australia Post executives were questioned about four $3,000 Cartier watches given to senior staff as a reward for a deal to do banking in post offices.
Performance bonuses worth almost $100 million and posties speeding on footpaths because of soaring workload were also scrutinised.
Union leaders slammed Australia Post's leadership over the watches.
CPSU deputy national president Brooke Muscat said members had taken a pay freeze while working harder during the pandemic.
"How are they rewarded? Not with a watch or a bonus I can tell you that," she said.
"Whether it's watches in 2018 or big fat bonuses in the middle of a pandemic, the Australia Post board and its management are out of touch."
Posties' union national secretary Greg Rayner wants the entire board to be stood aside.
"It's outrageous that Australia Post's CEO and board gifted $3000 watches to four senior, highly paid employees," he said.
"But it's not surprising given the other shocking decisions coming out of Australia Post's leadership this year."
The estimates hearing was told the total value of incentives was $97.4 million in the 2019/20 financial year.
More than $60 million flowed to 2500 employees involved in the corporate incentive plan ranging from senior staff to general managers.
A further $21.6 million was "thank you" payments for frontline workers including posties, drivers and processors, while $5.6 million was spent on gift cards for contractors and licensees.
Greens senator Sarah Hanson-Young questioned if the bonuses for people on high salaries were in line with community expectations during a recession.
"That's where the rubber hits the road and I can understand why people are pissed off," she told the hearing.
Australia Post's people and culture executive general manager Susan Davies defended the incentive payments.
"This organisation has served the community and Australia," she said.
"I've never seen the amount of volume that's come through. We've worked in extremely difficult circumstances."
Australia Post deliveries boss Rod Barnes responded to union research that found 43 per cent of more than 1000 posties surveyed admitted to exceeding speed limits on footpaths and nature strips.
Mr Barnes said there were serious discrepancies in the data and his experience of posties' work.
"There was concern raised that posties felt the need to speed on the footpath exceeding 10 kilometres an hour," he said.
"That is very concerning. That had not been raised to us previously."
Mr Barnes said Australia Post's three-wheelers had speed limiters that drivers should be engaging, while scanners provided information about parcel volumes.
