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Jul 28, 2023 / News
NFP Newsletter Edition 17 - Compliance
Uniting AgeWell back-pays staff more than $3.5 million
Aged-care services provider Uniting AgeWell Ltd has back-paid staff more than $3.5 million, including interest and superannuation after having signed an enforceable undertaking with the Fair Work Ombudsman.
Wholly owned by the Uniting Church in Australia, the charity self-reported its non-compliance to the regulator in September 2021 after discovering underpayments in a self-initiated review.
Underpayments were caused by Uniting AgeWell interpreting its enterprise agreements incorrectly, complicated rostering arrangements, and the failure to pay the right penalty rates and allowances.
Most of the underpayments involved a failure to pay overtime rates, for example, to employees who had had insufficient rest breaks between shifts or worked more than 76 hours in a fortnight. Shift and public-holiday penalties and allowances were also underpaid.
Between 2015 and 2021, Uniting AgeWell underpaid 4971 employees about $3.5 million and $127,640 in superannuation. More than 3300 Victorian workers were underpaid more than $2.7 million and 1667 Tasmanian workers were underpaid more than $800,000.
FWO Sandra Parker said an EU was appropriate as Uniting AgeWell had cooperated with the ombudsman’s investigation and demonstrated a firm commitment to rectifying underpayments and reforming its practices.
‘Under the enforceable undertaking, Uniting AgeWell has committed to implementing stringent measures to improve compliance and protect the rights of its workforce. These measures include commissioning, at its own cost, an independent audit to check its compliance with workplace laws later this year’, Ms Parker said.
‘This matter demonstrates how important it is for employers to identify and fix non-compliance in their processes. Errors particularly in Uniting AgeWell’s rostering and understanding of certain entitlements were left unchecked, which left hardworking employees missing out on their money.
‘All employers need to invest the time and resources to ensure they are meeting all lawful entitlements. This includes the higher rates for overtime and penalties.’
The EU also requires Uniting AgeWell to have relevant staff complete workplace training with a qualified professional.
UTS Sydney back-pays staff more than $4.4 million
The University of Technology Sydney is back-paying staff more than $4.4 million, plus superannuation and interest, and has entered into an enforceable undertaking with the FWO.
UTS reported its non-compliance to the regulator in May 2021 after becoming aware, when conducting an internal review while designing a new payroll system, that it had been underpaying employees’ minimum entitlements since 2014.
The underpaid employees performed work across the university’s seven faculties, primarily at the main campus in the Sydney CBD. They were engaged as casual professional staff.
The underpayments occurred because UTS failed to review and update its employment contracts and payroll systems to reflect an increase in minimum-engagement pay for casual professional employees first introduced under its 2014 professional-staff enterprise agreement.
The agreement, and the university’s subsequent 2018 professional-staff agreement, required casual professional employees to be paid for three hours per engagement, or one hour for those also enrolled as UTS students, regardless of whether they were required to work for the whole period.
Before 2014, the university’s applicable professional-staff enterprise agreement allowed UTS to enter into agreements with employees to pay them for shorter engagement periods.
Under its EU, UTS has agreed to back-pay 2777 current and former casual professional employees $4.4 million in minimum-engagement entitlements underpaid between September 2014 and May 2021 as well as more than $1.3 million in superannuation and interest.
FWO Sandra Parker said an enforceable undertaking was appropriate because UTS had reported its non-compliance and fully cooperated with FWO’s investigation. It had demonstrated a strong commitment to rectifying all identified underpayments and installed systems and processes to ensure that they were not repeated.
‘The underpayments by the UTS are the latest warning to all universities, and employers generally, that if you don’t prioritise workplace compliance and apply all entitlements, you risk underpaying staff on a large scale and facing enforcement action’, Ms Parker said.
Under the EU, UTS will undertake a university-wide review overseen by the FWO. Its aim is to ensure that UTS staff can be confident that they are being paid what they are owed.
The EU requires UTS to implement systems and process improvements, including training, to ensure compliance so that all current and future workers continue to be paid correctly. These measures include a larger UTS-wide review across all staff groups at the university’s own cost to identify and rectify any additional underpayments.
Employee entitlements changed on 1 July
As part of its 2022-23 annual wage review, the Fair Work Commission has increased the national minimum wage and minimum wages for awards.
From 1 July, the national minimum wage increased to $882.80 per week or $23.23 per hour and award minimum wages increased by 5.75 per cent.
Direct care and some senior food-services employees in the aged-care sector received a 15 per cent wage increase from 30 June.
From 1 July, the superannuation guarantee percentage rate increased from 10.5 per cent to 11 per cent. The new rate applies to payroll payments made to employees on or after 1 July, even if some or all of the pay period is before 1 July.
From 1 July 2026, employers will be required to pay their employees’ super simultaneously with salary and wages.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.
