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Aged care provider pays back $2.1m in missing penalty rates

Regulation

The Fair Work Ombudsman says payroll compliance in the sector will be a focus after 2,800 staff were underpaid for Sundays.

By Philip King 10 minute read

Aged care services provider Calvary Administration has signed an enforceable undertaking (EU) with the Fair Work Ombudsman (FWO) and paid out more than $2.1 million after uncovering underpayments to current and former staff.

The healthcare operation discovered it had failed to apply a Sunday penalty rate for two years and self-reported in July 2020 under its former name, Japara Administration.

The failure occurred following a new agreement and affected full-time, part-time and casual workers at aged care facilities across Victoria, NSW, South Australia and Tasmania.

An FWO review also found underpayments of annual leave loading under the Victorian enterprise agreement and of lump sum parental leave entitlements under five agreements.

As a result, between January 2017 and June 2020, Japara Administration underpaid 2,800 current and former employees more than $1.8 million.

With interest and superannuation, the company was forced to pay back $2,103,617, with an average shortfall of $751 but ranging up to $3,613.

All except 17 workers affected were in Victoria and most were part-time personal care workers, leisure and lifestyle assistants, coordinators and diversional therapists, cleaners, laundry and kitchen workers, cooks and maintenance workers.

Fair Work Ombudsman Anna Booth said it was vital that employers kept payroll software up to date.

“This matter shows how important it is for employers to place a high priority on their obligations, to ensure that their systems provide for full compliance with all entitlements,” she said.

“Shortcomings in the company’s payroll system and broader compliance led to breaches of their own enterprise agreements that left hard-working employees shortchanged.”

“Improving compliance in the care sector is a priority for the Fair Work Ombudsman in 2023–24. In this and other sectors, we expect employers to invest the time and resources to regularly review if they are meeting all lawful entitlements and to remedy any issues."

The EU requires Calvary Administration to ensure relevant staff undertake workplace relations training and run a service desk for a year so employees can raise queries about their pay or entitlements.

It must also make a $120,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.

“Under the enforceable undertaking, Calvary Administration has committed to implementing stringent measures to ensure its workers are paid correctly,” Ms Booth said. “These measures include commissioning, at its own cost, independent audits to check its compliance with workplace laws over the next two years.”

At the time of the contraventions, Japara Administration was a subsidiary of ASX-listed Japara Healthcare Limited, one of the largest aged care providers. In 2021, it was purchased by a not-for-profit Catholic healthcare organisation and renamed Calvary.

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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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