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Tassie aged care operator forced to backpay staff $6.9m

Regulation

More than 1,700 staff were short-changed over a seven-year period, with some now entitled to $100,000 or more.

By Philip King 10 minute read

Tasmania’s largest aged care operator, Southern Cross Care (Tasmania) Inc, is back-paying more than 1,700 staff a total of almost $6.9 million and has signed an enforceable undertaking with the Fair Work Ombudsman.

The FWO said the not-for-profit organisation had self-reported its breaches in August 2021 after identifying them during an internal review, with some workers short-changed $100,000 or more and the average back-pay over $4,000.

It said Southern Cross Care (Tasmania), which operated aged care facilities and offers home and community care services, conducted the review after identifying fundamental errors in its payroll and human resources systems.

These included failing to have agreements in place with part-time staff to work additional hours at ordinary rates of pay, which meant that staff were entitled to – but not paid for – overtime for these additional hours.

Southern Cross Care (Tasmania) also failed to recognise that shift-workers without written agreements were entitled to be paid from the start of their first shift to the end of their final shift each day, rather than just the hours worked during the separate shifts.

The underpaid employees worked across Tasmania including Hobart, Launceston, Somerset and Low Head.

The underpayments occurred between 2015 and 2022 with affected staff were mainly part-time aged care workers, nurses and community care workers who performed shift work. Full-time and casual employees were also affected while some cleaners, laundry and maintenance staff were also underpaid.

Southern Cross Care (Tasmania) was back-paying 1,708 current and former employees a total of $6.87 million, including $5,806,756 in wages and entitlements plus $313,591 in superannuation and $754,181 in interest. 

Individual back-payments ranged from less than $1 to more than $220,000, with six workers underpaid more than $100,000.

Overtime entitlements accounted for the majority of underpayments but employees were also underpaid wages for ordinary hours, penalty rates for weekend and public holiday work, as well as paid meal breaks and shift penalties and allowances.

The workers fell under the Social, Community, Home Care and Disability Services Industry Award 2010 and applicable Enterprise Agreements.

FWO said Southern Cross Care (Tasmania) had already back-paid the large majority of employees and had to back-pay all staff by the end of September.

Fair Work Ombudsman Anna Booth said an enforcement undertaking was appropriate as the employer had cooperated with the FWO’s investigation and demonstrated a strong commitment to rectifying underpayments.

“Under the enforceable undertaking, Southern Cross Care (Tasmania) has committed to implementing stringent measures to ensure all of its workers are paid correctly,” she said.

“These measures include commissioning, at its own cost, three annual independent audits to check its compliance with workplace laws.”

“This matter demonstrates how important it is for employers to place a high priority on their workplace obligations. Fundamental errors – including failing to ensure that written agreements with part-time employees were in place – were left unchecked, which led to long-term breaches and a substantial back-payment bill.”

The agreement also required Southern Cross Care (Tasmania) to provide FWO with evidence of systems and processes it had put in place to ensure future compliance; commission workplace relations training for human resources, payroll and rostering staff; write to all underpaid employees to notify them of the commencement of the enforceable undertaking; and display workplace notices detailing its contraventions.

 

 

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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