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South-East Queensland water utility has entered an enforceable undertaking with the FWO after short-changing almost 800 employees.
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Seqwater forced to back-pay staff more than $7m
30 September 2022
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One of Australia’s largest water utilities has entered an enforceable undertaking with the Fair Work Ombudsman after underpaying workers more than $7 million.
Seqwater supplies South-East Queensland and was one of the parties involved in the 2011 Brisbane flood, eventually winning an appeal against a class action by victims.
The FWO was advised of Seqwater’s underpayment of staff after it self-reported following a review of its practices.
The water utility discovered it underpaid more than 790 current and former employees because it incorrectly determined that it was not required to provide several entitlements listed in enterprise agreements because the employees were on individual contracts.
The company also said that payroll system errors and process issues were also to blame.
The ombudsman found that workers were underpaid from 2016–22, with the largest individual back payment more than $380,000.
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The FWO’s enforceable undertaking with Seqwater ensured it would accurately reimburse its employees, with the workers receiving $7.75 million in back payments to date, including superannuation and interest.
The FWO has given Seqwater until February 2023 to back-pay all remaining underpaid workers.
The majority of the underpayments were in relation to overtime but other entitlements involved travel, on-call and callback allowances, remote assistance allowance, leave loading and ordinary hourly rates.
Seqwater was also found to have breached record-keeping and pay slip laws and along with the back payment was required to make a $545,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.
The chief executive of Seqwater, Neil Brennan, apologised to those underpaid.
“I want to apologise to both our former and current employees who have been affected by this issue,” he said.
“Seqwater commenced a large-scale review of our remuneration practices in 2020 to determine whether there were any areas of concern.
“Our review has determined this was largely a result of complex and ambiguous enterprise agreements, and our payroll system. We are undertaking an extensive program of work to repay current and former staff and have implemented a comprehensive suite of controls to ensure compliance with obligations.”
Fair Work Ombudsman Sandra Parker said that the enforceable undertaking was the correct course of action as Seqwater had shown commitment to rectifying underpayments and to future compliance.
“Under the enforceable undertaking, Seqwater has committed to implementing stringent measures to ensure workers are being paid correctly,” said Ms Parker.
“Seqwater’s breaches and subsequent significant back pay bill demonstrate how important it is for employers to place a high priority on workplace compliance, including having a clear understanding of how any enterprise agreements apply and performing regular checks to ensure they are providing employees with all lawful entitlements.”
As part of the enforceable undertaking Seqwater is also required to:
- Engage an independent expert to review its underpayment rectification process and provide the report to the FWO
- Publish media, social media, website, and workplace notices detailing its workplace law breaches
- Operate a hotline for employees to inquire about their wages and entitlements for 12 months
- Apologise to workers and unions
- Provide evidence that it has developed systems and processes for ensuring compliance in the future
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