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More than 8,500 employees were underpaid for seven years, says the FWO.
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Healthcare company forced to back pay staff $7.3m
20 December 2022
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Healthcare company Australian Unity has been forced to back pay staff more than $6.8 million and enter into an enforceable undertaking with the Fair Work Ombudsman after miscalculating wages for years.
The FWO investigated the ASX-listed company after it self-reported non-compliance in November 2020 after becoming aware of payroll errors in its independent and assisted living businesses.
The company conducted a review that found underpayments due to system and set-up errors, rostering and manual processing errors, incorrect interpretation of obligations, and inadequate training and payroll processes.
The FWO investigation found breaches from 2014-21 across 10 former and current enterprise agreements and two state awards regarding penalty rates, minimum engagements, overtime, travel time, leave accruals and superannuation.
As a result Australian Unity back paid $6,851,391 in wages and entitlements to more than 8,500 workers and has taken steps to rectify the remaining $516,428 in underpayments.
Individual back payments ranged from less than $1 to more than $23,000 while the average underpayment was $739.
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Australian Unity was required to enter into an enforceable undertaking with the FWO that obliged it to pay all amounts owing within 120 days, as well as make a contrition payment of $250,000 to the Commonwealth's Consolidated Revenue Fund and publish notices at all worksites, apologise to underpaid employees, and run an employee hotline.
Australian Unity’s group managing director Rohan Mead said the company regretted the errors that led to employees being underpaid.
“We always seek to pay our people correctly and would never intentionally underpay anyone,” he said.
“To minimise the risk of these issues reoccurring, we’ve made a number of enhancements to improve our systems and processes.
“We would never want to jeopardise the positive, ongoing contribution that our employees make to the community.”
Employees impacted by the underpayments worked across multiple locations in NSW and Victoria, including Sydney, Newcastle, Melbourne, Geelong, and Ballarat.
Their roles were throughout the business and affected workers included chefs, nurses, catering employees, residential care workers, administrative workers, gardeners, and maintenance workers among other positions.
Fair Work Ombudsman Sandra Parker said an enforceable undertaking along with the contrition payment were appropriate as the business had shown a high level of commitment to the rectification of the underpayments.
“Under the enforceable undertaking, Australian Unity has committed to implementing stringent measures to ensure workers are paid correctly,” said Ms Parker.
“These measures include engaging, at the company's own cost, an independent auditor to complete two annual audits.
“This matter demonstrates why employers should prioritise workplace compliance and ensure their systems and processes meet all requirements of relevant awards or agreements.”
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